Hello,
I had a Transporter and now a Duet, setup in a similar fashion (Duet-DAC-Pre). I ran FLAC files and the sound was quite good with standard Redbook but I had problems. The Logitech Squeezeserver software wouldnt recognize all of my files and I had ripped the majority with the same software (DBPoweramp). I switched from Win XP to Windows Home Server and finally to Win 7 Ultimate. I also switched machines, and eventually built a standalone FLAC server. I have been in IT and supporting Microsoft desktop OS since Win 3.11 there was nothing all that complicated about what I was doing. I did everything from re-ripping discs to searching the hacker forums to see how I could get the FLAC files into the Squeezeserver database. I switched to MP3, tied it to iTunes and the software found everything and now works as it should. The sound is less than stellar but it works. Believe me; it was way more difficult than it needed to be. To make a long story short: I am planning on a Mac mini now and will compress my files to the ALAC format. The DBPoweramp software will convert from FLAC directly to ALAC, so I am hopeful it wont be too bad (3000 discs). I did trap ID3 tags on the FLAC rips so I am hoping all that makes its way across to ALAC. If it doesnt work, I get to spend the winter re-ripping everything for probably the 3rd time. Im not wild about iTunes I like a simple Foobar 2000 type interface. I hate being solicited to buy more music and despise ads. I will dig into Apple OS X a bit more and I am sure there are other ways to crack that nut. Its got a Linux style shell so I might be happy with a prompt. Maybe I can even script some of the ripping process.
Id go the Apple route if I had it all to do again. I am not a big fan of Steve Jobs and his OS is anything but perfect. We fix as many Mac problems as PCs on our campus but for digital music streaming Apple has a solid solution that seems to work well.