http://www.rane.com/note110.html

There are two situations when you can't transformer isolate unbalanced connections.

a) the circuit works best when the - of the balanced side is tied to ground.

b) the circuit works best with the - of the balanced side not connected to anything.

Some circuits don't care, and in others, the performance changes noticeably when it's done the wrong way. It depends on how the balancing is done.

There IS a "sound quality" factor involved, but only with say 10%(if that many) balanced circuits. Most don't care, such as mixer line ins - most people connecting unbalanced connectors are using typical 1/4" guitar cables where ring would be shorted to ground anyway, so it doesn't make sense to design a circuit where tying pin 3 to ground screws things up. I forget if the 10% of the circuits out there are the ones that mess up with pin 3(-) is lifted, or if they mess up when it is tied to ground. I guess that makes me an awful tech. But I have seen strange behavior with some balanced gear wired improperly to other unbalanced gear.