.

Then, is it worth getting a DAC?

Yes a DAC is worth it. Just because your files are lossy doesn't mean a DAC or improved digital audio system is less worth it. There are some nice low cost DACs available now that will sound better than onboard computer sound and better than the sound from a portable player like an iPod.

Furthermore, do high end DACs make a difference? Whether an expensive DAC provides an audible quality difference is debatable/subjective, but it's not likely to make a difference, unless you specifically want a DAC that "colors"/distorts the sound.

Subsequently, one may also ask, what makes a DAC good?

A DAC simply converts a digital signal into an analog one so that your headphones can then create sound. It's that simple! Sometimes the DAC assembly would be improperly shielded—introducing staticy noise—or it'd be a little too cheap, making the output kinda crappy. Lower sample rates, badly encoded MP3s…

Will a DAC improve my CD player?

Every cd player has a DAC (digital to analog convertor). More expensive cd players usually have better (more expensive DACs) making them sound better. This is usually also the case with external DACs where the sum of the parts are better quality than you would see in an average player.