I agree with george_k's observation as far as 'burned' cd's are concerned. They don't sound as good as the original. ( I have posted about this on another forum ). Unless the original is one of the many harsh, bright, overly compressed, and otherwise obnoxious recordings that permeate much of today's offerings...in which case the 'burned' copy might relax the sound a bit. (Which may be a good thing. 
)
As for playing WAV files vs. FLAC files directly ( thru a network player, or otherwise) I can offer no opinion. I play cd's out of necessity....on a cd player 
. Not because I love digital; but because it's my only digital source. Someday, I'll likely add a music server of some sort to my system to play 'mixes', and internet radio, etc. But I can't fathom it being my only source.
I have to echo what Clay W posted...."Vinyl, it seems, is keeping it alive".
I just got my turntable back from SOTA that was in for an upgrade.....Ahhhhhhh.... 
...high fidelity is indeed still alive.
WEEZ
Modern optical drives can read CDs faultlessly if the CD is free of scratches. People who use EAC (which verifies the ripped audio down to the last bit with a known-to-be-correct reference rip) confirm this all the time. And from personal experience, if I rip a CD on my laptop which has an old CD-RW combo drive in it, and rip the same CD on my new server with a DVD-R drive in it, I get exactly the same audio file. I mean EXACTLY down to the last 1 or 0 (I checked).
It isn't possible for a CD player to improve on such a perfect performance. Perhaps, it might do a little worse - which might or might not cause an audible difference. Or more likely, CD players perform the same (perfect reads on unscratched discs).
Once a CD has been ripped, converting it to FLAC has absolutely no effect on the sound quality as long as the data lives on a computer. FLAC is analogous to winzip - what you put in is what you get out when you extract it again, exactly and precisely with no changes whatsoever. Remember, this isn't grooves in a plastic disc, it's 1's and 0's and there is no in between. Either it is an exact copy or it isn't - and just like with winzip, with FLAC you get an exact copy of what you put in.
I'm not talking about digital processing in general. What I am saying is that if you rip a CD to computer and do nothing to it except convert it to FLAC without replay gain or anything else fancy, you get what was on the disc. So any differences in sound must be due to parts of the audio chain, be it a S/PDIF connection or analogue output stage. Or of course a placebo effect.
Let me tell you story. Even with all of the above knowledge I still found my CD transport sounded better than a Squeezebox 3 used as a transport. Well, the truth is the truth, I don't mind saying it.
Better soundstage was the main thing. The comparison was unfair, because though old my CDT cost many times what the SB3 does, but it annoyed the hell out of me, because I liked the convenience of the SB3.
I did a blind test with a friend a couple of months ago, SB3 vs CD as transports. The difference was very clear to hear, better soundstage, more natural perspective, picked the same player every time. It was the SB3, to my surprise. Since then, a lot of my conceptions are out the window.
If you've never tried a blind test, give it a go. It's fun! Just before it starts you get this silly smile over your face which says "This audiophile pretender may be about to be found out!". Just that feeling right there is a real experience, and then there's the test itself. If you've never tried it - and even if you don't agree blind tests are very worthwhile - go on. I guarantee you'll get that sheepish smile as you start!
Darren
