So I have entered the dark murky depths of the Computer Audiophile underworld! Too make things more awkward I want to use wireless streaming to receive my audio signal. Shock Horror!
I have two devices at my disposal, the Airport Express N or Apple TV. Both feature optical output (which is shunned by audiophile snobs who prefer copper Sp/dif) but to me sounds great. The Apple TV uses a regular optical output whilst the Airport Express has a minijack like on the imacs, cd players and macbooks.
The advantage of the Apple TV is that it uses 8GB as cache, and therefore works better over slow networks. I had problems with dropouts with the Airport Express when joining an existing network and also when using a created network when using Windows Vista over G,no problems with Windows 7 & G).
The main problem I found with the Apple TV is that the remote on the ipod/iphone doesn't work particularly well. I found that when I setup my own network on the Airport Express the ipod/iphone remote runs better and faster and also has a slightly better interface than selecting Apple TV in the remote.
The other advantage of Airport Express is that it is running the network much closer to where the action is. The problem with Apple TV is you have to share with everyone else using the network and the WAP might be to far away. Because wireless is like a hub, there are pauses in the network when everyone has to use it (although this doesnt affect the Apple TV as it caches its stream). Therefore if you setup a separate network with just two (AX and PC) there are no interruptions. The latency on a pure N network is fantastic.
The other important settings are to make sure that you go to control panel sounds and change the default from 48k to 44k which degrades the audio. This is a silly default setting as Windows has to resample your music from 44k to 48k (Most CD"s are in the 44k format). The other is to make sure the EQ and sound enhancer are off in itunes & the volume is at full, so this ensures bit perfectness from Apple Lossless files.
Oh yeah BTW, apple lossless is the preferred format. You can use AIFF but the streaming protocol will convert it to apple lossless anyway!