I'm in the process of designing a soundcard. However, I'm a little confused over one aspect. The primary usage of the soundcard's output will be playing 320kbs mp3s through a program (Traktor, VDJ, Serato...). I'm under the assumption that one cannot polish a turd and am struggling to see the point in supporting sample rates of 96Khz and bit depths of up to 24 bits. Any insight?
The point is to have more resolution than the typical final output so that there is less rounding error. 96khz is chosen because it is exactly twice 48khz which is the standard audio sampling rate for video. This way, you can cut the audio from 96khz to 48khz by cutting the number of samples in half, so there aren't aliasing problems. Similarly, 24 bit audio gives 8 bits more precision than 16. It's the minimum increase that makes sense since you want the samples to be a set number of bytes.
This allows for 256 times the resolution in terms of intensity and twice the temporal resolution while editing and limits rounding error so that the final output is higher quality when it is mixed down to 48khz or 44.1 khz and 16 bit.
If the soundcard is only going to be playing 16 bit, 48khz sources, then there isn't any gain by supporting the additional bits and samples as the device on the other end could accomplish the same by simply sampling the audio at the desired rate and bit depth since the information is already lost, but it makes a lot of sense when using higher quality inputs.
Not sure about your output, but here's an example of why I would want a sound card to meet or exceed 96KHz at 24 bits on the input side. I have a Zoom G2.1u effects processor and a Tascam DR-08 that both can deliver 96KHz 24 bit audio, so I would want to be sure my sound card could deliver this fidelity to my DAW or NLE.