If my memory serves me well, the native MP3 decoding on the squeezebox uses all its 24 bits to make the stream as accurate as can be, while decoding the MP3 stream to FLAC on the computer would only use 16 (possibly depending on the implementation of the software decoder). But if this were the case, coding FLACs from MP3's might actualy sound worse.... i might be wrong though :-)
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