You might want to read up a little on S/PDIF.  What you're saying about
error correction is valid for asynchronous digital transmission
standards such as TCP/IP.  However S/PDIF is synchronous - that is it's
sent at a steady rate in real time - and there is no error correction. 
Not only that, the fluctuations in the rate at which the bits arrive
can affect the analogue out, because most DACs reconstruct their clock
from the signal itself (so as to avoid under/overflow issues).  Jitter
in the arrival time of the bits can affect that clock even if there are
no bit errors, and that jitter will distort the sound by an amount which
can range from totally inaudible to subtle to awful.

On the other hand DACs are a mature technology, and modern and
well-desinged ones are extremely good at jitter rejection, so this is
probably irrelevant.


-- 
opaqueice
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