Wow, what a thread

Where's Nap's insightful comments when we need it.
IMHO, comparing a CD Player and BDP with a 44.1/16 file is still a huge improvement even if you exclude the jitter discussion using a great dac (BDA) or a very poor dac (MF vDAC). We can't ignore the fact that there are read errors with transports and cd rot or scratches on the disc so CDs might be a more reliable format than an LP, it's still not even remotely as reliable as a file. Eventually when a reviewer reports the BDP-1's jitter playing a 44.1/16 file connected to the BDA or another dac then you will have the much needed numbers. The reported jitter measurements with the BDP/BDA for the higher rez files are amazing, it would be interesting to know what products have less jitter at any file resolution.
For those stuck on playing back music with a computer, do yourself a favor and at least do a home audition of the BDP even if is for kicks. If your only goal is to playback audio, the BDP will have the advantage over any computer with it's custom power supply, modified sound card and an OS that only runs the minimal service required not to mention no video card, no wifi, no bluetooth, etc. Running Windows 7 or Mac OSX, you will still be running a few dozen processes that are unnecessary for playback, not to mention the various software and tricks you need to do to ensure correct playback. In the end you will always be second guessing it after each OS or application update.
As for the various file formats, there are very few products that can decode audio streams other than PCM or DSD on die. Several of the newer generation Apple products can decode h.264 and by extension AAC and possibly Apple Lossless. I'm not aware of any products that will decode FLAC or WMV on die. For most DIY HW, Linux, Windows and even the BDP, the only audio stream accepted to the sound-card will be PCM, so the driver or perhaps the application will perform the task of converting it to PCM before shipping it off to the sound card.
The fun thing about the BDP is that you can monitor the CPU utilization with various file formats and clearly AIFF and WAV 44.1/16 is the lowest, next is ALAC 44.1/16, followed by 44.1/16 FLAC, and then 96/24 WAV and 96/24 FLAC following the rear (just random songs, monitoring the load and cpu utilization). I've downloaded one album (free) in 96/24 FLAC, 96/24 WAV and 44.1/16 ALAC, and went ahead using the WAV file to create 44.1/16 FLAC and 96/24 ALAC, and added them all to the playlist. It's very difficult to hear a difference between the various formats, but I do feel that I can pick out the 96/24 over 44.1/16.