Hopelessly mid fi?

I recently hooked up an 80 gb ipod to my system through an Apple dock and did an A/B with my CD player. I am able to match the db level between the two via the volume control on the CDP, and switch between sources instantaneously for a meaningful comparison. Much to my chagrin, the difference was minimal at best. So I brought in a Squeezebox and hooked a digital IC into the CDP's DAC with similar results using both compressed (AAC 192) and Apple Lossless formats. From what I have read on this site, I assumed that it shouldn't be possible that compressed or streaming digital should rival the sound of, by all accounts, a reputable CDP (name intentionally withheld). But it does.

Is it possible to assemble a digital front-end, for say, less than $2K, that would produce a meaningful improvement over both the ipod and Squeezebox? An external DAC perhaps? Or is my system simply not capable of resolving the differences? I'd prefer not to overhaul the rest of my system if possible which includes an Odyssey Candella preamp and Extreme mono amps, Von Schwiekert VR-4jr speakers and Virtual Dynamic Nite II cables.

Thanks for your thoughts.
I'm not sure about the claim that a reputable CDP will outperform a computer based transport. I would imagine the most of the difference will be in the DAC and the downstream. That's not to say that all transports sound the same, but the difference in the transport is probably a lot more subtle than differences in DACs for example.

I have recently acquired Accustic Arts DAC, and it definitely improved red book over my Linn Unidisk SC. You might want to consider adding a DAC as well.
Its a bit difficult to answer your question when you have "intentionally withheld" the imformation on your CD player, but nevertheless.

In my experience, the difference between compressed files and Lossless, is very clear even just listening through the iPod itself - it shouldn't need a highly resolving system to discern this difference (though I imagine the rest of your system is actually pretty resolving anyway). Likewise, when I had my iPod docked in an Arcam dock feeding an analogue signal to my amp, it was clearly inferior to my mid-price CD player and that was playing lossless files. I found the best way to listen to my iPod was through the Wadia 170i Transport which feeds a digital signal from the iPod to my outboard DAC via a digital jitter suppression device. In this context, the sound from the iPod was equal to the CD player with the same jitter reduction device and the same DAC. Please see my review of the Wadia 170i here on A'gon for more information.

If you can't hear the difference between the various sources you described, I wouldn't be looking to spend $2k to try and hear the difference - if you enjoy the sound of any of the combinations you already have, be happy and buy more music. :)

If you are fixed on upgrading your source, I would look at investing in a decent DAC (some outstanding ones at under $2k) which would provide a significant upgarde to your CD player and SB. Alternatively, the Wadia iTransport plus a decent DAC is another outstanding option but get a DAC that does its own internal jitter reduction.
Computer drives are reportedly superior transport mechanisms. Evidently the data the computer uses must have very very low jitter and a clock that ensures an accurate constant data stream.
I assume all this is not actually the reader but the correction elements.
I have always been surprised how good computer generated music sounds even when burned onto a CD for use in an "audiophile" CDP.
Unless you have a very special CD player the transports invariably fail before any other elelement. An older CD player even a once great player that uses one of the 2 common transports, will start sounding progressively worse over time.
I recommend borrowing your audio nut buddy's almost new but burned in just this week EMM,Meridian, Esoteric etc. player and do the comparison.
If you have an old player that still works lying around compare it to the name intentionally witheld player. Suddenly it will sound fantastic. You will save serious money that way. Then buy the Wadia Dac.
Were the lossless files ripped error free?

If not night and day diffs, the replay should at least sound more rounded and natural with the lossless files.

The comments here on a dejitterizing and worthwhile DAC are true! IME Either way... PC audio or disc player.
Much to my chagrin, the difference was minimal at best.

This matches my experience. I find differences are relatively subtle - often far less than typically found between a good recording and a bad one. I had a friend over and he could not hear the benefit of a separate DAC versus the straight sound from my DSP preamp. I have to admit it was close but once you pick up on the slight differences and begin to know what to listen for then it becomes much more noticeable. However, I'd agree with anyone who said it was not "night and day".
Thanks to all that responded. Blindjim, I do rip using error correction. And the differences I could detect had to do with soundstage width and to a lesser degree, depth. While not an indictment, the CDP is a Cary 303/200-which I have always liked. And Hens, I wouldn't say I am unhappy with the sound of my system per se, just trying to sensibly extract more from it. Haven't changed things in awhile. All recommendations welcome. Thanks again.
I don't have a super expensive setup (obviously relative), but the difference in 320k mp3's and flac are very obvious to me when played back on a Consonance 120L CDP...yet 5 years ago using a Yammie HT Receiver they sounded the same....so you're answer may lay in your pre/amp setup as opposed to the source. Just my two cents, YMMV

I also agree that the difference between compressed and uncompressed music is easily discernable. I have a few MP3 addicted friends who never heard a comparison between MP3 and wav or flac files and once I played both for them, they couldn't believe the difference. The Cary CD player is a decent rig. I am not familiar with the preamp & amp. That could be the reason why both sound the same but there may be more there. What it is, I'm not sure. Have you played a well recorded track both ways and compared? There realy should be a large difference between the two.
The wikipedia has links to some excellent references and historical perspectives on MP3 and compressed audio in general, as well as some references to results of listening tests. It seems that as you approach 320K, most people cannot discern between the compressed file and a lossless format, but most listeners could tell a difference at lower bit rates. There is also some mention of the possibility that music with a lot of sudden dynamic changes, like well recorded orchestral music, may be more difficult to compress without artifacts, at least in comparison to more dynamically squashed music, like most modern rock and pop. So perhaps the type of music has something to do with perceived differences as well.
Sdatch may be on to something. The music in question is/was, in fact, rock. Perhaps more experimentation with different forms of music is in order. And Lwood, the same thought occurred to me as well. Could be down stream.

Thanks to all for their input.
It shouldn't matter what type of music it is, I can tell that right now and I am listening to lossless Audioslave, and I have probably one of the worst systems on this site. The difference in every instrument is instantly recognizable. Guitars are sharper and quicker, bass drums tight, cymbals crisp, vocals clearer. You have to have a problem upstream or with the room.
If you are comparing the cd to mp3, amd the cd is commercial pop or rock 1980's), (some of) those recordings on cd were poory recorded, with low dynamics and compressed. They actually may not be distinguishable from an mp3 on some systems. I know they sound pretty poor on mine.
Something to consider, when interfacing with your computer: (http://www.stereophile.com/digitalprocessors/731/)
Nice article... a bit dated but good thoughts there.

My exp has been such that once a prime digital source has been selected. One capable of conveying all the info it gets from the presented media, changes to the down stream items & accessories yields still more benefits.

The media too, as was noted can effectively lift system performance, albeit not nearly so much... but still some.

given your desire to not pursue wholesale chages, and the items you now own aren't bad ones, nice in fact, I'd consider moves surrounding the source, and the way it delivers it's info to the preamp, first.

Every system I've had which used a preamp, the preamp can be (and IMO), is as important as the source. In other words I put as much $$$ or more into the preamp as I do the source... routinely.

owning a lesser Odyseey amp, it does respond well to isolation, and power cable changes. So there's that.

The bottom line for me as of late has been this... "If you like what you are getting, keep doing what you are doing. If not, change what you can, when you can. Everything makes a diff in a good audio system."

AS was noted too, other musical content/genre than rock & pop will reveal more overall sonic qualities.

Using the best recorded media seems to me the best way to establish and monitor changes in performance as ones sytem develops... whether I like the genre or not to begin with. Actually this path also unlocked for me new doors to audio and has since allowed me personal growth in music appreciation. My horizons have been broadened, let's say.

In fact, due to the quality of the recordings in some of these other musical areas, I now prefer them to my staples of blues & alternative music. Sheesh, I'm even digging big band jazz lately! hampton, Miller, Pepper, Goodwin, Jacquette, Nocturne, and others. Dare I say it? yeah, classical too just recently.

Again, "If ya like what you're getting...."
Some facts(regarding Digital audio and music reproduction) are not going to change any time soon: (http://home.swbell.net/ronsuthe/technology.html)
Thanks to all who took the time to respond. Blindjim-thanks again for the thoughts. I am currently experimenting with leaving the tube preamp out of the chain and running the CDP straight into the amps. And I a bottleneck. Noticeably better soundstage and transients running direct. While I do need a pre, perhaps there are some in your experience that might fit the bill. Given my musical preference, I am thinking solid state. I like the details. Needs two pre-outs, remote, standby mode ideally, used will do. Thoughts?
DETAILS? SS? Twin sets of outputs? (why this last item?)

The BAT SS preamp latest ver could do that for you… a friend here whom I value his imput has said to me the Rowland Capri. Perhaps a nice Krell?

Personally, if them amps ain’t changing anytime soon, and they aren’t balanced truly, I’d stay with a tube pre. Some Thor 1000 MK II are being sold now at most attractive $$$. They are a super buy, despite the lack of current support. Paul, took a powder on us.

They’ve superb build and only use 4 tubes. Self biasing too. Plug and play, virtually. They do sound best with Thor amps, but I do so dig mine! It’s a keeper for sure as it would be well beyond my means to improve upon it’s performance alone…. And every amp I’ve attached it to has been taken to antoeranother level. SS or HS..

I’m certain other preamps can and will do the trick for ya, but I can not really say as I’ve not tried them all with Odyssey amps.

Long as you stay in the active preamp camp, and get a well made, well designed, and good performing unit, I’d say you can’t go wrong if at all. Especially with the input impedance of the Extremes. They are 100K each, right? That’s hard to mismatch a preamp to… 100K. Thereafter, it’s a simple matter of tastes. I simply like the input of tubes some where and a preamp seems the usual suspect for me.

oh... and I do listen to rock too... just not exclusively.

Good luck
Thanks Blindjim. Need two pre-outs for subs/bi-amping. I like what removing the tube preamp did in my system (cleaner highs, stronger/taught lows), so I prefer to experiment with SS. Too much detail missing with what were sold as more "dynamic" tubes. I am not married to any one component, but would prefer to integrate things one piece at a time to fully realize the changes any one piece can make. Your time is appreciated.
No prob...

Two sets of outputs ae nice, though not necessary. I've used, and do use, a pair of very nice Y adapters with good success in lieu of that second set of outputs. Of course, XLR's would be another story. After all, splitting a signal is splitting a signal.

It's funny how your mention of the diff from your tube pre and the straight ahead approach were so noitceable.... and for the better in your opinion. I'm sure you did see it as better.

I'll say this and leave it at it... There are tube preamps, and then there are tube preamps. Nuff said.

Those same sentiments you espoused were mine after replacing a BAT VK5i preamp with the Thor TA 1000 MK II... then agan, the BAT sold new for $4500... the TA 1000 MK II had a price tag of over $8500. big diff, huh? there is indeed. Tubes too make a diff and as importantly, the tube vendor.

Given your thoughts perhaps going with a CDP which has it's own gain stage... a nice one too... might well be the ticket for you, over adding/replacing your preamp.

My own personal philosophy is debateable and many do, though some subscribe to it as well... I start at the front and work my way back. other's begin with speakers and work their way forward. I suppose you could also begin in the middle too.

I also like to hang around just past that point of diminishihg returns... some times well past it, but not out of sight from it.

Ayre is quite popular and many like Levinson or Classe. Try getting Klaus on the hook and ask him what he's seen do well with those Extremes... just a thought.

Good luck.