Is this a reasonable Audiophile Mac-based Server?

That looks like a pretty good set up. I tried airport express in my xp network and it failed miserably. It ended up crashing my entire network and it took days just to get my email back. Apple tech support was stumped. But you shouldn't have that problem with Macs.

The thing that concerns me a little is carrying the lossless files wirelessly from your airport base station to the express. If you can go ethernet you'll have a faster and more reliable stream. (Plus, I thought I heard someone say in your other thread that wireless streams get compressed?)

Either way, for the short period of time that the airport express worked in my system it constantly cut out to buffer the lossless files.

When the airport express didn't work out I had basically two choices left. SB3 or Sonos. I went Sonos but you probably can't go wrong with the SB3 either. I have it set up similarly to yours but have the NAS connected via ethernet to the router, the router via ethernet to sonos, the sonos via digital coax to the Dac. No desktop computer is needed between the NAS and the Dac. Laptop is wireless like yours for controlling playlists. (I didn't bother with Sonos remote, I live in an apartment. But like having the option for later)

What I like about your setup is that you can stay 100% in itunes.

"RDC's experience is atypical"

No doubt. Apple wouldn't sell those AE's like popcorn if they didn't work at all. Henry did open the thread with "best sounding music server, regardless of price"

I doubt AE, SB3 or Sonos is that. Transporter probably isn't either from what I've read.

Re-thinking Henry's set up, if cost really isn't a factor I'd probably eliminate the desktop in the other room and put a mac mini and the best sounding USB Dac near the hi-fi rig, then use the laptop or some other cool apple device to control it from the listening chair.

And I still think I would hardwire the streaming if at all possible and leave wifi for controlling playlists and other computer tasks...

You should be able to try it both ways to see what works best. I got into this whole thing by trying airport express. It didn't work in my system, but as others have pointed out, that could be the exception rather than the rule.

Try it. If it doesn't work for you, return it to the apple store. Cat5 cable is cheap and easy to test too.

My system ended up being hybrid wireless. Ethernet connections from network drive to router to music server (sonos) then to dac. Wireless laptop controls playback. Simple and reliable.

Just stick a SB3, sonos, transporter or mac mini next to your dac and you'll have great sound that you can control from your listening chair wirelessly with your laptop.

Don't do anything that takes the laptop away from your lap or binds it with wires when it is there. There is a simple way around it.