New Apple Lossless encoder??

Have you contacted Apple Support regarding this problem and if so what was their response????

The weak link in iTunes is the actual D/A conversion on your computer. The output of most computers' sound cards is simply atrocious, and the iPod isn't much better. But, if you have a quality outboard DAC, you can make iTunes sound like an audiophile-quality CD source.

A few weeks ago, I picked up a Benchmark DAC1. After listening to the improvement on my CD player, I connected the DAC to my computer via an optical TOSlink cable.

Now, I can't hear any difference between music in iTunes (the lossless encoded files) and my CD transport. The quality simply blew me away.

The CD player is a Simaudio Equinox CD Player (a phenomenal-sounding player on its own), but the Benchmark DAC sounds even more detailed and open than the player on its own. So, getting the equal quality of out iTunes (via the DAC) is quite a feat.

Try it. You'll be shocked at how good it sounds.

Disclaimer: this won't help your .mp3 or iTMS-purchased songs -- but Lossless audio plays incredibly well.

I used iTunes with Apple Lossless Encoder to import some on the album SKYLARKING by XTC. The song "Dear God" had a lot of hissing and scraching in it. Did I do something wrong? I just bought the 60GB iPOD.

The concept behind lossless compression is sound. It should generate output identical to the CD original. A relatively full explanation can be found here: http://en.wikipedia.org/wiki/Lossless_compression

Shorthand example: if a digital signal is 111111111100000011111111110000001111111111000000, that takes 48 characters to describe. I could also describe it as 3x((10x1)&(6x0)) which takes 16 characters to describe. In terms of data file size, I've achieved 3:1 compression. What's obvious is that you need to be able to decompress (translate the formula) in realtime. Compression formulas are much more complicated than this little example, but for computer chips these days, this is a very easy task.

Having said that, I've NEVER listened or compared or tested Apple's output, but I expect that feeding to a good D/A converter would yield CD quality.

it is still a compressed format and is convenient but not the same as transpiort and dac combo with good digital cable...of course analog still sounds better than all of it!!!