I asked Santa to bring me an Audioquest Dragonfly for Christmas. It has received rave reviews from pretty much every audio publication and costs around $250. If Santa doesnt' bring it, I'm going to get it myself. I'll post a short review when I get it.
I have researched this extensively and the best options that I found under $500 were the Peachtree Audio DAC-IT (~$450), the Arcam rDAC (~$450), the Schitt Bifrost (~$450), and the Cambridge Audio DacMagic 100 (~$350). Not only is the Dragonfly smaller than any of those options, but it's easier to power (direct through USB) and sounds just as good as any of the other options. One drawback is that it only does 24/96 instead of 24/192, but I think that I can live with that.