The defaults should be fine.

By default: "lossless files will be sent with the best lossless method
the device knows how to handle (best meaning 'FLAC' or 'WAV', in that
order); lossy files will be sent directly if they are a format the
device knows, else they will be decoded on the server and sent in the
best lossless format available"

Ie, FLAC and WAV will be sent as FLAC.  AIFF will be slightly modified
(I believe the main difference between AIFF and WAV is the header and
byte order.. transcoding is lossless of course) and then sent as FLAC. 
MP3's will be sent as mp3's (no reason to decode them and re-encode as
flac), etc.

On things like the SB1 that doesn't do FLAC, things get sent as WAV
instead of FLAC, unless it's mp3, which the SB1 can do natively.  Oggs
on the SB1 will be decompressed as well, and sent as WAV, since it can't
do FLAC or OGG.

This changes when you use bit rate limiting, which forces everything to
be sent as mp3.

Some people believe that FLAC and WAV sound different.  This has yet to
be proven, though.

I've never seen a reason to switch from this logic.


-- 
snarlydwarf
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