jtienhaara, you need to better understand the filtering and maths behind the DA stage of conversion.

Your illustration is what happens when you draw straight lines between samples. A DA doesn't do that. Or rather, it does, and then an analog lowpass filter smooths it out. You will have the original sine wave resulting in both cases, because there it is only mathematically possible that a single kind of wave can result from samples at those points.

Let me illustrate this. Figure A shows some sampled points taken at 44.1Khz sampling rate. What do you suppose the resulting waveform will be, post-DAC?

Figure B shows you what it will be, after filtering. This is a 22Khz sine wave.

A

B

The reason for all this is because those "stairstep" waves you showed contain tons of information above Nyquist. That is, a square wave is based on a fundamental sine frequency plus an infinite amount of sine overtones waves. Once you subtract those overtones, which is what the Nyquist lowpass filter in a DA does, you get the original waveform.

There are even some audiophiles out there who build DACs without any filtering at all. They rely on the natural properties of their speakers - which can't go much past 22Khz - and their ears - which can't go much past 18Khz in most cases - to do this exact same kind of filtering for them. And it works. You don't hear those square waves up there or the distortions they introduce. You hear the pure sine.