Not sure about the comparative costs, but we have had a Sonos system (www.sonos.com) for about 2 years now and are very pleased with it. The hand-held controller is great, and because Sonos sets up its own wireless network, you can use it anywhere in the house. The system can run off your computer or a NAS hard drive (a better option IMHO since you don't need to have your computer up and running.) It also is very flexible in terms of expansion. It has digital optical out so you can use the 990's DACs. You can stream Rhapsody, Pandora, Sirius and Napster (with subscriptions). The downside might be the price. A basic system -- controller, wireless bridge and zone player -- would run about $850, and you need a DSL or better broadband internet connection.

If your "audio upgrade" also includes better sound may I suggest Option 5: don't change your Adcom equipment but put a tube buffer between the preamp and power amp. The Yaqin does a fantastic job for $175 plus shipping; see http://www.pacificvalve.us/YaqinTB.html. It really works. Look under the "why is the 990 so tall?" thread.

Slim Devices claims the Squeezebox will play from iTunes: http://www.slimdevices.com/pi_features.html although I've never tried this. You can download their SlimServer software and try it with a software Squeezebox and see how the iTunes integration works.

I've had my Squeezebox for about two years and I really like it. Of the audio outputs I've only used the optical, partially as mine is on a shelf and the thinner cable is easier to hide. The sound is just dandy although I haven't noticed any difference with my new 990 (but the 7700 did help :-) Makes a nice clock too.

The Sonos system seems nice but its Desktop Controller software doesn't support Linux which makes it a non-starter for me.

As an update on the Sonos, it does play from iTunes, which we use for our music. I have two iTunes libraries set up -- one slightly compressed for the iPod, and the other uncompressed for a feed to the Sonos/990.

Based on the excellent information provided here, I'm probably going to stay in the two-channel audio world for now. I'm considering two M2200's to replace my dying Adcom amp or I've toyed with the idea of something like the NAD c372 to replace both Adcom components.

If I do stay in the audio-only world, the Squeezebox or perhaps the Sonos (depending on the quality of the DAC) will make more sense than Apple TV. It seems that both the Squeezebox and Sonos work well with an itunes library, aside from the (current) inability to play protected aac files.

RCF051,
Thanks for the info on Sonos - it looks perfect for getting music to multiple places in my house. Does your Sonos system work smoothly with iTunes? Specifically, do you have to rescan your iTunes library manually or are iTunes changes/updates/playlists recognized automatically?

It is not automatic, but it is very simple. You load the Sonos Desktop Controller program onto you computer -- it mimics the hand-held controller. Once Sonos knows where to look for your music, you can download music into iTunes and then make Sonos aware you have done so by using the hand-held controller or desktop program. The only caution I have (and I don't think this is particular to Sonos, but more to iTunes) is if you plan to run different music libraries (as I do -- one compressed and one lossless) you need to make sure you have the correct library loaded into iTunes before synching with Sonos, so that you don't wipe out one music list and replace with another. Even if you do, thought, the solution is fairly easy -- get the iTunes library to the one you want, the resynch with Sonos. BTW, Logitech has just announced a new (or updated) distributed music system for the house at the CES. Don't have much info on it, but it might be worth a look.
http://www.logitech.com/index.cfm/172/4180&&cl=us,en