I believe that the necessary circuits were used on the Sony Playstation 1 to achieve very good sound quality. There was no cutting corners.
After doing modification on my Sony CDP M11 (entry level CDP)
http://www.pinoydvd.com/index.php/topic,43433.0.html, I am convinced that using application notes and recommended circuit for the specific D/A converter used in your really does wonders to the sound quality. It is not enough to simply replace capacitors to better ones but to understand each circuit block so that the appropriate circuit or components can be added.
In this modification, I replaced the output circuit used by the Sony CXD2552BQ D/A chip on this CDP - the 2 pcs daughter boards on top of the picture to the right of the transformer. The original output circuit used by the CDP is much more simplified one and does not really achieve the sound quality I had in mind.
If the modification was simply replacing capacitors I believe I would not have achieved a very good sound quality level.