jax2- let me correct some of your statements. 1) you don't need a squeezebox or transporter to get remote control capabilities from the mac. actually you are wasting your $$$ if you get the squeezebox and you could do better by getting different equipment for the same $$$ as the transporter. 2) you don't want to use the monster toslink to rca cable since you will not get the quality of the music that you want. 3) you don't need to use only the toslink connection to the dac.
I'm a bit confused by some of your post. I think you may be misunderstanding my responses. Since you said you are "correcting" me, I'd like to respond: 1.)I made it clear my response was quick, brief and off the top of my head. Basic advice. I don't think I said that a Squeezebox or TP were the ONLY solutions. If anything I said actually could be interpreted that way, it was not my intention to suggest that 2.) I also suggested that there were alternatives to the mini-toslink that Apple provides in their kit (Monster). 3.) This is news to me, so I'd like to learn something here - If you don't use the optical connection from the AE, what other way can you feed the digital stream to an external DAC? As far as I know the only way to stream digital with an AE is via Toslink.
As far as your recommendation for a setup - It looks like a fine way to go and I use something similar in my office system (though I go wired via USB there). Again, since the poster stated he already has a G5 tower he intends to use I did not suggest other computers, and I'd reiterate my warning that the antenna used for wireless for that computer is utterly worthless in my experience (which is why I use an Airport Base Station). The reason I suggested what I did is that I use a Modwright Transporter and the sound from that via wireless or via a wired feed from a transport is better than any digital source I've heard before and surpasses anything I've owned. I believe the DAC in the stock TP is the same one use in some of the very expensive Esoteric players. There are surely many other solutions, some cheaper, some more expensive. Mine is probably not what most consider a "budget" solution. Pick your poison. There are many ways to make it work. Depending on what standards/expectations you have, you may or may not be disappointed in any given approach. In my limited experience using the AE modules via a toslink connection to external DAC's I've consistently been disappointed with the sound. That's not to say that it is not possible that someone else might get better results, or may be happy with the results I was getting. Different strokes and all that.

