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Over time this issue has been reported on to death.
PCM is better sounding and it makes sense to send all your streamed music to the player in PCM.
It also unloads the format change from the player and leaves it at the server which, in general, has greater resouces.
The two formats which concern me are FLAC and WAV. By default, FLAC is sent to the player, the user should change this for the above stated reasons. Remember to click APPLY in the lower left corner when done.Below are the correct settings