This article is from the rec.audio.* FAQ, by with numerous contributions by Bob Neidorff others.
In a nutshell, they are virtually the same.
There are some excellent sounding 1-bit players and some
excellent sounding multi-bit players. Some feel that the 1-bit
technology has more future because it can be improved with the
rapidly improving digital technology, while the multi-bit
players improve with slowly improving analog technology.
Multi-bit also has its advocates.
All of the various D/A converters try to do the same thing, and
try to achieve the exact same ideal performance. How well they
succeed is more a function of their skill and the quality of the
parts that they buy than the technique that they use. In other
words, the architecture of a D/A converter is less important
than the quality of its implementation.
 
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