dvenardos: I am a 970 owner who just bought a Squeezebox within the past month (I LOVE the Squeezebox, by the way).

As far as two-channel performance with my 970, I have been very happy with it configured as follows: Analog bypass mode, using the analog HPF/LPF 80Hz crossover setting for my sub.

I, too, was less than impressed with the 970's internal DAC performance, and in an A/B comparison of the 970's DAC and the DAC in my Cambridge Audio 640C CD player, I much preferred the Cambridge. Recently, I upgraded to an outbaord DAC that supports digital streams from both the SB and the Cambridge. I have not played around too much with the analog outs of the SB, prefering instead to use my new DAC. I can tell you, however, that I prefer the new DAC over the Cambridge.

From what I have learned perusing the Slim Devices forums, the performance of the SB's internal DAC is on par with a decent mid-fi CD player (i.e. in the $300 - $400 range). Further improvements can be had by upgrading the switching power supply that came with the SB to a linear, regulated power supply and also by going with an outboard DAC.

Whether using the SB's DAC or an outbaord DAC, many people claim they prefer the sound of the SB over a standard CD player. I recall a review where they compared the digital out from a SB to the digital out from a CD player fed to the same DAC. The SB sounded better. Why? The SB receives a pure digital stream wirelessly from the harddrive of your PC, thus eliminating problems associated with the transport from a conventional CD player (vibration, jitter, etc.)

BTW, I am also using FLAC. And I'm glad to see another Outlaw out there using the SB! Feel free to drop me a line and we can swap notes about ripping, etc. It can be a little overwhelming at first, as there is not much in the way of user guides for the open source software commonly used. I'm still learning the ropes, so I can't say I'm anywhere near an expet, but will be glad to share what little I know!