The best method I've found for replaying digital audio on my system is the following:

Buy an Apple Airport Express unit ($110 or so...)

Install the Airport Express (AX) near your system.

Run a digital mini-optical to Toslink cord from the AX into your receiver.

Stream direct PCM digital into your receiver and let your receiver's DAC take care of the work.

You can send digital audio files from iTunes to any Airport unit in your home (I've got a few) and it's amazingly good quality playback.

You can find some great info here in this regard as well:

http://forum.audiogon.com/cgi-bin/fr...mp&1&ctg&0&50&