Apple Airplay Sound Quality

What is the potential for sound quality via Airplay? Is this essential WiFi? Or Bluetooth? What technology is being used and what are the limitations? I've reviewed all the material I can find and don't see that information (in my own non-technical language, anyway).
Well, let's say this, almost every room in the Venetian @ CES this year was using a Mac product as a source, sure they're were TT's and high end CD players, but most people had either AirPlay or a Mac as a source......
Can't wait till we have high end Airplay compatible transports. It appears that airplay is lossless (but doesn't support 24/96 it think). My only concern is regarding latency and jitter issues.
I think the direction that may prove popular are airplay enabled DACs, essentially a suped up third party version of the airport express.
I'm praying that PS Audio somehow implements Airplay into their PWD Bridge and upcomming digital lens. It would be a killer feature!
I understand that Airplay for audio is the same as AirTunes on Airport Express.
NKBG you are correct, it is really nothing new. It would be nice if they changed the software to be able to stream higher resolution, I don't think any hardware changes are needed.
If i have all my music stored in Apple Lossless format and I'm streaming it directly from my iphone to my airport express and in to my Bryston DAC is it the same as streaming it from my laptop?

In other words, if the files are apple lossless on my iphone, are they streamed that way, or down converted somehow?
Stereophile says it's CD quality. 16 bits 48khz.
Airport Express is CD quality - 16 bits of and 44.1KHZ

Of course you need to CD quality (lossless) files in order to get the full benefit of CD quality.
Single hangup with the AE is HUGE jitter. Some DACs, my 840c among them, simply do not like this amount of jitter, and have audible problems.
Sterophile had reviewed the first iteration of the AE and found its analog output to be somewhat lacking but as a transport, it achieved reasonable performance.

I am somewhat surprised to hear about the jitter issue via the optical output as mine works perfectly fine as did Stereophile's test unit.

It does play CD quality recordings without any issues but I will give a quick experiment this evening to see if it will do anything higher out of the optical output.
The results of the quick test I took was as follows.

I sent a 24/96 file via Airplay to my receiver with integrated DAC, an HK 3490. The end result was the display stated the signal was 44.1Khz PCM. I can only assume that there is some down sampling during the process, but I do not know exactly where.

I will prepare some more testing to gain more clarity on the matter but I would not be surprised if what I found was additionally confirmed.
I thought the stereophile test measured large amounts of jitter?

I know my 840c simply doesn't like the optical input while the analogue output of the AE is only OK. But, in this case convenience trumps ultimate quality.
My lossless files transmitted in this fashion easily best the MP-3 / 320 or so stuff off the small dish / sirius feed.

Look at comments associated with 'figure 7' for detail
There are two traces on that graph and one is for the analog outputs while the other is for the Musical Fidelity X-DAC V3. The only thing I am not sure is if the MF device is using something to reduce jitter. He does note that it performed better then his RME card from his computer.
Provided you happen to have an Apple Airtunes enabled device, then you should be able to get cd quality from it. The new Apple TV @ $100 takes an Airplay stream and is a 16/48 device making it cd quality. It's wifi...Apples own proprietary system. The beauty of it is using a streaming device such as an iPad to stream music wirelessly from the web and then stream it via Airplay to your hifi. It's got potential.