A DAC is a digital to analogue converter. Your cellphone has a DAC to convert the digital sound to analogue to shove it through the speaker and headphones. Everything has a DAC.
A soundcard is basically a DAC on a card with often a headphone amp, and some surround sound decoders, and software with all the options like EQ, Dolby Digital, etc.... A USB headset is basically a cheap USB soundcard with built in Dolby Digital, and a cheap headset attached.
An actual DAC is just a small box. You plug it into USB and windows will install drivers automatically. Use the manufacturer drivers to support higher quality sound rates. That's it. In control panel you select your DAC as the output sound device and it acts like a soundcard. It takes digital sound through the USB and outputs it to your speakers or headphones with a headphone amp. The DAC does the conversion from digital to analogue, not your computer. And the quality of this DAC will be superior to what onboard sound has. For example my onboard audio will hiss when there is no sound. My DAC is dead silent all the time. It works great and I have both speakers and headphones plugged in simultaneously and just flick the switch on the DAC to select. A good soundcard works good as well, but you can have driver issues that interfere, especially with a change in Windows versions.
People use DACs to get better quality sounds compared to the DAC built into their stereo, xbox, cellphone, computer, soundcard, etc... I use a DAC because it's convenient, works great, doesn't have driver issues, etc.... A USB DAC is designed just for computers. The downfall of using a DAC is you have no software. And it's just stereo sound. You don't have analogue 7.1 outputs for computer 5.1 speakers. But some DACs have a SPDIF passthrough to output surround sound to a receiver. Also you don't have software for an EQ, virtual surround sound etc... That's where Razer surround comes in. INstall that and you get those options just like owning a soundcard.
I am also not dependant on an onboard soundcard and headphone amp, therefore with each upgrade and motherboard purchase I can take a $120 motherboard as opposed to a $225 one. I always have the DAC which is awesome. For the mic I just use a USB samson since I don't use the analogue input of the soundcard. It's a bit better than the Blue Snowball. The Yeti you mentioned is overkill in my opinion, unless you want to do podcasting and 2 person interviews then it's great. Samson also has solutions similar to the Yeti. The snowball and samson are around $50. The shockmounts are another $25 and the arms can be found on Newegg for as low as $25. That's around $100 for a complete setup which isn't bad considering the quality of the mic. I'd recommend a better quality arm but that's it. The shockmount has to be the manufacturers one designed for the mic. Some mics have a built in shock mount for the pickup then you don't need the external mount.
Headsets are great if you don't want a mic taking up desk space. Also if you don't do a desktop mic properly it'll pick up keyboard noise. You want the shock mount and arm to get it off the table. Then set the sensitivity of the mic to pick up your voice and not anything else. A headset or modmic just works good first shot, and they are noise cancelling. But I like having my regular headphones, no mic, regular cable, and I can just take them and plug them into the stereo for a movie. Also using a DAC it's on the desktop, so my headphones plug into the desktop, not way down on the floor into the back of the computer which is a pain. I don't need an extension cable or anything.
A headset is not better or worse then a seperate headphone, mic design. A DAC is not better than a soundcard since a soundcard is basically a glorified DAC. I just prefer the versatility of reliability of seperate components. My AKG headphones will last a lifetime, but I have yet to see any USB headsets last more than 2 years. My DAC will last me 10+ years and always be top quality, whereas I've gone through many soundcards that have issues. My USB mic being USB and powered, works amazing. It all pays for itself considering the reliability and the fact I don't buy USB headsets like their disposable, and I don't need expensive motherboards and soundcards.
The problem is many PC gamers are teenagers or younger and don't know real pro audio. They want big logitech speakers with a big sub cause they think it's better. They have never tried a nice $200 pair of powered monitors without a sub that'll blow their $500 logitechs out of the water. Look at any recording studio and they just use stereo monitors for speakers. Not fancy home theater setups. But I've noticed in the past 3-4 years people are starting to get into high end headphones more for gaming compared to before they never used headphones at all. And USB DACs are becoming very popular among the computer crowd. This has to do with soundcards and motherboards advertising that they come with high qaulity burr brown DACs and a headphone amp. People are aware of this stuff now so some are migrating towards real headphones and seperate mics.
Also I buy my audio gear through my local guitar music store at great prices. Like guitar center in the states. You don't have to go through Newegg for a DAC and headphones.
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