My understanding is that it occurs in slimserver before it is
transmitted to the SB2 (the SB2 will only decode FLAC).  If you go into
the Slimserver settings interface and goto "File types", there are a
list of format conversion modes.  You need to check the one that
converts Apple Lossess --> FLAC (and uncheck the rest of them if you
only have Apple Lossess files)...


-- 
PhilNYC

Sonic Spirits Inc.
http://www.sonicspirits.com
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