Hi nogoodboyo,
Even if you use the fixed-level outputs on the CDP, you are still going through the CDP's analog section. Assuming it's competently designed (most are), I doubt you would hear any significant difference between it and the NAD.
When you say you could use the NAD's preamp, do you have a NAD preamp? A power amp does not have a preamp, unless you are speaking of an integrated amplifier, which does.
If you have an NAD preamp, it would give you access to tone control circuits, etc. If you can't switch those out of the circuit with a bypass, they may introduce slight spectral changes even if the controls are set to the neutral position. Tone control circuits are never completely linear or "flat".
The only way you can bypass the CDP's analog section would be to use a coaxial or optical digital output and go through a different D/A converter than the one in the Sherwood.
Regards,
