Yes you are right about the breadboard this will involve the a breadboard to prototype it however about the dip adapter instead of an adapter it appears that the best value for money right now would be to purchase a breakout board on ebay they can be had for 13 dollars just by searching VS1053 and sorting by price lowest to highest and scrolling down a bit then click on the development board or here is the cheapest one but still good quality http://www.ebay.com/itm/MP3-Module-Development-Board-AMS1117-Recoder-For-VS1053-/280794429816?pt=LH_DefaultDomain_0&hash=item4160a6f978
I believe it is actually cheaper to buy the development kit than just buying a dip adapter and as for an i2s DAC the ic chip has a built in one I personally would just do with that as it would be simpler however if you do want to use an external one after a quick search I would recommend this:http://search.digikey.com/us/en/products/PCM1753DBQR/296-26301-1-ND/2254953
As it is under 3 dollars for one however you will have to buy another adapter which are on ebay for 2 dollars http://www.ebay.com/itm/SSOP-16-to-DIP-16-pin-Adapter-PCB-SMD-Convert-/140598901069?pt=LH_DefaultDomain_0&hash=item20bc58f94d
and here is an awesome web page about how to use it:
http://kalum.posterous.com/50759184
and you need an lcd here is 16x2 character display for 3 dollars
http://www.ebay.com/itm/New-1602-16x2-HD44780-Character-LCD-Display-Module-LCM-blue-blacklight-/140738656157?pt=LH_DefaultDomain_0&hash=item20c4ad779d
and now though after looking all this up and think about the cost and I know I am not the first person to say this
But the thing is it will cost alot more to order all the stuff and make the pcb board and all the time involved to me appears not to be worth it I personally would just buy an mp3 player but if you have an idea that can't be done with a normal mp3 player (I do which is why I am interested in audio playback with the arduino) then this is something that you should consider however what you want do except maybe the
USB support for external HDD/FlashDrive Optional
SPDIF Output Optional
Ethernet and/or WiFi support to access Audio Files from a Network Share Optional
which maybe a product does support some of those things without my knowledge.
And also did you edit your post to include the vs1053 or did I just miss that and made post that suggested the same thing that you did?