If your using a True Digital connection like Toslink/coax/fiber/hdmi... doesn't matter what sound car you have.
Realtek Onboard is by far the best audio solution available in that department due to it's simplistic and just works implementation.
Add in cards.... well that's mostly for those still using anolog connections in which realtek or no onboard audio solution has any real DACs but sound cards do. Up to you mostly... driver issues and well when it comes to windows vista/7.... zero hardware acceleration so if someone so much as mentions performance advantages... sorry but there is a performance reduction
Everything has a DAC. Otherwise you'd just hear white noise. We can't listen to pure digital signals.
Onboard sound is better than people think, and it's been getting better. Some computers, depending on the components used, will have a lot of http://en.wikipedia.org/wiki/Electromagnetic_interference which will increase the noise of onboard chips especially. Cheap sound cards might also be affected, but good ones are shielded and will prevent most or all of it. Outboard options, like external DACs, will be immune.
The real reason a gamer is going to want a sound card is for surround sound emulation with headphones, which works wonderfully. Creative sound cards or anything which uses their technology are generally regarded as the best for this, with ALchemy for Vista and 7. There are sound cards which use Dolby Headphone too, http://www.newegg.com/Product/Product.aspx?Item=N82E16829132010. Which works best is usually up to the individual, because they both use slightly different http://en.wikipedia.org/wiki/Head-related_transfer_function standards and one might fit a person's head better.
If you want a cheap solution, the ASUS Xonar DG is $30 and has Dolby Headphone. Temporarily out of stock on Amazon though.