In my case I have to say yes it will. I like to think my setup is fairly high end and I am now convinced that a well setup PC/Squeezebox/DAC frontend will do all a CDP does and more.
One has to question the cost. Yes a SB is cheap but a PC & DAC aren't. I started this thinking that replacing my CDS2 with a CDS3 was expensive (it is) so using my existing PC keeps the copst down but if you are starting from scratch you'd need a PC £500, HDD £250, Squeezebox & bits £300 & DAC £2000; all in all the same price as a good CDP.
I understand the theory as to why Naim keep their DAC close to the transport, less chance of nasty interference etc but I'm not sure how that applies with a PC as the packets are nothing special until they hit the Squeezebox. So keeping the signal path between the DAC & the Squeezebox might be important.