Summary: I admit up front that my expectations were probably too high. After all, I was paying several hundred dollars for a Denon product, and all I was asking was for it to fill a small computer room with music. Heck, the speakers are only a few feet from my head. I even bought a powered subwoofer to go with it to help with the lows.
Summary: Build quality of unit is very good (it's a Denon). Speakers are well made, and are well matched to unit. If you listen at normal levels through the speakers, this system is hard to beat. However, if you listen through high quality headphones, or through the speakers at low levels, you will notice a constant background hiss. It makes no difference which mode you are using...CD,the radio, or mp3 - the background static is always present.
Summary: After investigating various micro stereo systems, Denon DM38S Micro was selected, although it was more expensive than others. Upon receiving the unit it, we found that the system did perform very well for a micro system. After a month and a half the built in CD player began to have sporadic problems but the problem would eventually go away. Then the CD problem didn't go away and the CD player stop functioning.
Summary: Unless you have the DM-38 in the Pure Direct sound mode, this stereo has an unacceptable level of background static noise. I tried two others at a local stereo store to verify that I didn't have a faulty unit, and it wasn't just mine, all three I listened to had this same issue. In my opinion, a product touting sound quality should not have such a fundamental problem as excessive background noise (I wish I would have noticed the SNR=80dB number in the manual before...