For the AirPort Express Base Station (AX), the audio is handled by a Texas Instruments PCM2705 digital-to-analog converter which it outputs on a 3.5mm stereo minijack. However, the innermost end of the 3.5mm jack is an optical S/PDIF transmitter.
The AX works only with iTunes v4.6+ and is limited to music files that iTunes can read; i.e., 16-bit data only. (An exception is you can use a third-party product like Rogue Amoeba's AirFoil to stream other non-iTunes sources.) These data, though, can be in any file format that iTunes recognizes, from lossy MP3s at the low-quality end of the spectrum to Apple Lossless and lossless AIF or WAV files at the high end. It is also important to note that the AX functions only at a 44.1kHz sample rate. When you play 32kHz or 48kHz data, iTunes sample-rate-converts the data in real time before sending it to the AX.
you mention that Itunes can only read 16 bit data.
I can play 24/96 ALAC files in iTunes and the "Get info" confirms them as 24 bit 96khz files. Isn't iTunes working with Quick Time to output these 24/96 files to my soundcard(Audigy 4 24-bit soundcard)?
I sure hope iTunes doesn't downsample all 24/96 files, esp when I am just playing through my soundcard (ie. no AX)
I'm not 100% sure, but I think the down-sampling is only for streaming with AirTunes to an AX. I don't think this would apply to your PC's sound card.
iTunes uses a QuickTime CODEC to convert audio files to Apple Lossless, and then, uses AirTunes to send them to the AX. In turn, the AX uses built-in firmware that converts the Apple Lossless to an Encoded Digital Audio format. From there, digital audio is sent to a optical transceiver to convert the electrical signal to an optical one before sending it to the innermost part of the audio port. For analog, the AX has a built-in DAC to convert the Encoded Digital Audio to Analog which is sent to the same audio port.
You may want to post your question to the iTunes Discussions area as there are definitely more iTunes audio experts there to answer any concerns you may have.
