Milesandcoltrane,
I decided to use first option with jitter suppressing (reclocking) Benchmark DAC1. According to Stereophile measurements AE has respectable 258ps of jitter further reduced by the DAC processing. Clarity of sound is incredible and I don't have to connect anything or run wires across the room. Another benefit is that data on Hard Disk and the data send to AE in packets does not contain timing. The playback program (I use Itunes) or computer used (noisy or not) don't make any difference.
You will be limited with AE to 16/44.1 but I don't use other format so far. Also, it was reported that some DACs are too slow to lock back to signal after the gap suppressing few seconds of new song. My Benchmark doesn't do this but possible remedy for that is to crossfade songs. I thing that it is related to speed of PLL (Phase Lock Loop). It has to re-sync quick after the gap and I know that my Benchmark, being reclocker/upsampler, has fast reacting PLL. I don't know if AppleTV has the same problem. Also, data is sent to AE in ALAC so I keep it stored in ALAC to relief main processor from compressing.
During installation of AE you want to "join existing network" instead of creating new. I read that it was source of grief for many people. Don't use analog outs on AE. Measured jitter is much higher and sound according to many posts here is much worse.
http://www.stereophile.com/digitalprocessors/505apple
I decided to use first option with jitter suppressing (reclocking) Benchmark DAC1. According to Stereophile measurements AE has respectable 258ps of jitter further reduced by the DAC processing. Clarity of sound is incredible and I don't have to connect anything or run wires across the room. Another benefit is that data on Hard Disk and the data send to AE in packets does not contain timing. The playback program (I use Itunes) or computer used (noisy or not) don't make any difference.
You will be limited with AE to 16/44.1 but I don't use other format so far. Also, it was reported that some DACs are too slow to lock back to signal after the gap suppressing few seconds of new song. My Benchmark doesn't do this but possible remedy for that is to crossfade songs. I thing that it is related to speed of PLL (Phase Lock Loop). It has to re-sync quick after the gap and I know that my Benchmark, being reclocker/upsampler, has fast reacting PLL. I don't know if AppleTV has the same problem. Also, data is sent to AE in ALAC so I keep it stored in ALAC to relief main processor from compressing.
During installation of AE you want to "join existing network" instead of creating new. I read that it was source of grief for many people. Don't use analog outs on AE. Measured jitter is much higher and sound according to many posts here is much worse.
http://www.stereophile.com/digitalprocessors/505apple