If your system has a free PCI or PCI Express slot, you'd do well to populate it with a Xonar sound card rather than filling one of your USB ports with the U3. The USB Xonar's signal quality simply isn't good enough, and its lack of high-definition audio support is difficult to ignore. Asus didn't intend for the U3 to end up attached to desktop systems, though. On its native turf in the notebook world, the newest addition to the Xonar family truly shines.
The U3 sounds so much better than my ultraportable's integrated audio that it's become a permanent fixture in my notebook bag. I was briefly worried that having the device draw power from the USB port would dramatically reduce battery life, but that simply hasn't been the case. When looping an HD movie clip with Dolby Headphone enabled, the Xonar config reduces the system's marathon run time by a scant 11 minutes. That's a trivial price to pay for a palpable improvement in sound quality and overall functionality.
That added functionality is what really seals the deal for the Xonar U3. Speaker virtualization and EAX emulation are rare in the notebook world, especially among mainstream and thin-and-light systems. You'll have a hard time finding a laptop that can encode Dolby Digital Live bitstreams on the fly, too. Add up everything it offers, and the Xonar U3 looks like a great value at just $40 online. Audiophiles need not apply, but I'd recommend the Xonar U3 to anyone in the market for a cheap laptop audio upgrade, especially if they'll be playing games.
Still, I'm left wanting. The U3 may be a great value, but I'd be inclined to pay more for something with a nicer casing, better sound quality, and the ability to handle HD audio streams. Whether that can be achieved without sacrificing the U3's portability and minimal power consumption remains to be seen. A casual browsing of the fancier USB DACs on the market reveals a lot of designs that are substantially bigger than the Xonar, and I'm not seeing a lot of support for positional audio, speaker virtualization, or Dolby Digital Live encoding.