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I'm in the process or re-doing my entire collection. My audio system upgrade has reminded me of how piss poor mp3 is. I'm going to keep using iTunes as my "master" app as I am a Mac person and like the ability to have good meta data. You can rip to aiff (lossless format), Apple lossless, or various flavors of mp3 and aac. I can also make playlists with the lossless songs and stream those to my stereo using Airtunes (I'm still trying to figure out if it does any compression...I don't think it needs to as it should sustain up to 54mbps). I can also have other playlists with mp3/aac for ipod.
The downside is two versions of each song but I've already got most stuff ripped to mp3/aac so that isn't an issue.
The dedicated home media servers are just glorified computers so as long as you can get the right high fidelity connectivity (Airport Xpress has toslink for digital connection to my receiver), your computer can do it. Just get a big external drive and put all your music there.
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