[cody69]

I'm a bit confused about the different formats of information passed from a mac mini to an outboard DAC connected to an airport express (I'm using toslink cable to MF V-DAC). When using iTunes for music ripped using apple lossless format, I assume the DAC sees a digital image that represents what was originally on the CD disk.

When I use airfoil to stream from Pandora or Grooveshark, is it a comparable format the allows the DAC to convert to an analogue signal?

I'm basically trying to understand if the outboard DAC can handle the sources I'm likely to be sending it from the mini via iTunes or airfoil, or are there certain streams that the DAC will not be able to handle. And if it can't handle them, how will I know this and how are these handled?

[srb]

Any format that can be played in iTunes can be streamed to the Airport Express. The AE is limited to 16-bit/44.1 KHz files and will stream 16/44.1 files bit perfect.  Anything above or below that resolution will be resampled to 16/44.1.
 
There are some issues with the 2nd generation Airport Express wireless 'N' model having dropouts on the optical output with some DACs (due to high jitter), most notably the ESS Sabre DACs.  Peachtree Audio modified one set of optical and coaxial outputs on their Decco and Nova units to work reliably with higher jitter sources.  Users have also reported dropouts with the AE-N and the ESS Sabre-based Eastern Electric MiniMax Tube DAC and the Wyred 4 Sound DACs.  The 1st generation Airport Express wireless 'G' units did not exhibit the dropout problem with their optical outputs and the aforementioned DACs.
 
Most sources can be streamed to the Airport Express with Airfoil, including web-based audio from Pandora or Grooveshark.  There have been some issues streaming from Spotify, but those have been addressed in the most recent Airfoil version.
 
Steve