hi rnhood,
I regard the Transporter as one of the best purchases I have made. I love the whole streaming audio philosophy and the Transporter does it very well. Sound quality is one par with high-end CD players and other good quality CD/Dac combinations IMHO. At this level it often comes down to personal preferences and system synergy.
Yes, I have heard better sources (only slightly) but at a much higher price or highly modded CD/Dac combinations. There is no way I'd ever go back to using a CD player. I listen to music hours every day and I found swapping CDs a real PITA, plus I found I was scratching my favourite CDs to the point were they started jumping.
I don't download music so I can't comment on hi-res, I only use ripped WAV files from CDs. But having said that, I do have a few mp3s from iTunes and found the hi-res ones sound better, actually I was pleasantly surprised. The ones I have sounds a lot better than many of my poorly recorded CDs I have.
regards