Is this a reasonable Audiophile Mac-based Server?

I think RDC's experience is atypical. I used an XP computer to AE with absolutely no streaming problems. I don't know what happens enroute but the data from the AE is not compressed.

The reason most say that AE route is inferior is that the AE data has a relatively high amount of jitter. If your DAC can handle the jitter then data is data and a jittery toslink data from the AE will be the same as less jittery USB data. I used one with an Altmann DAC which has circuitry to deal with the jitter and it was superb. I would assume other DACs that somehow reclock or deal with the jitter would be fine as well.

The AE cannot output audio data via the USB port, only via the toslink or analog out.

Onhwy61 makes the point elegantly and succinctly - the issue here is not capability but reliability...

a reliable connection that sounds like crap is as worthless as a unreliable one that sounds great.

Unfortunately there are no definites here. I have been using a wireless connection in many scenarios with absolutely no reliability problems. Evidently some have had problems. At this point you have many opinions but the only way to know for sure is to try it. An Airport Express is only $100 and you can get most of that back on eBay if you find it doesn't meet your needs. That is the cheapest first stab at the problem.

Restock's experiment is inconclusive. When you have multiple variables in an experiment it is impossible to determine which causes the effect. The conclusion that USB is better than toslink ignores the fact the transporter may be introducing large amounts of jitter. This may be the cause of the inferior sound and may have nothing to do with toslink. A better comparison would be

1. Mac Mini feeding Benchmark DAC1 via USB
2. Mac Mini feeding Benchmark DAC1 via toslink

even though this isn't conclusive either since despite what Benchmark says the DAC may indeed work better with USB. This isn't saying USB beats toslink every time, only that the Benchmark may be better with USB.

All I can say is that in my system ....XP computer - wireless - Airport Express - toslink - Altmann DAC the sound is fabulous, jaw dropping, stunning, ..(insert your own adjective here)

Restock, maybe I missed it but I don't see where you used anything but a jittery optical out compared to the USB.

Go here to get an older version and try that

http://www.oldapps.com/download_iTunes_mac.php

I still don't believe that toslink is inferior. If all the bits get there and the interface is designed properly how could it be inferior. It has to be a problem with the DAC or jitter from the source if it sounds different. Perhaps the DAC designer figures no self respecting audiophile will use toslink so they don't put any effort in to it. These comparisons I see prove nothing about toslink, just about toslink on the particular DACs and sources used in the shoot out.

That said if the DAC you choose does have an inferior optical input then you should use another input.