Hi Eric:
For most applications, the PWM output works great. It sounds good and can drive a small or medium speaker with good volume. It's also easy to use. You just plug a speaker directly into the PWM port and you're good to go. We use PWM almost exclusively. If we need really loud volume for something (like for demos at a show), then we use our
PWM Audio Jack
to hook up powered PC speakers. This little board plugs into the PWM port and has a standard 3.5mm audio jack.
Another trick for increasing the volume level is to use a higher power supply voltage. For example, if you're powering your project with 3 batteries (4.5V), the audio output will be louder than if you're using 2 batteries (3.0V).
The DAC output uses a transistor to drive the speaker and it provides a true analog audio output. It can drive a heavier load and generally provides louder output. The reviews on the DAC output are mixed, with some saying that you do hear more noise during quieter parts of the audio. To get the DAC optimized for your application you might need to tinker with the bias resistor (R10 on the Fox board). Our recommendation for most applications is to use the PWM output unless you really need to use the DAC output. For example, the DAC output might be required if you need to mix the analog audio output with another audio signal.