Hi, I'm doing something very similar to what you are inquiring. As you say, for detailed, focused listening, a quality CD player is best. I am using a Meridian for my primary listening, but for background, music, for parties (which I've done twice recently), and for working around the house, the PC experience has been wonderful. (I should also note that my equipment, like many listeners, is ever changing).
As you started to discuss, I've recorded the abundance of my collection to PC. Primarily a large removeable hard disk drive (200 MB) with a USB and/or 1394/Firewire connection (mine has both). This method has allowed me a bit more experimentation with setups. I have also bought a HUSH PC, this is a "noiseless, fanless" PC design. It has no PC fans and uses other cooling methods, it's quiet as its name indicates. So far no complaints and is a nice addition, it can do both DVD and CD, but its primary roll is a music server in both my, and my wifes work areas (as well as a file server and printserver for two separate printers, it is on all the time and makes no or very little noise - you really have to pay attentions and listen closely to hear it - the drive spinning or a CD/DVD spining sometimes makes some very quiet, but audible noise).
Second, I've also tried my notebook PC (a desktop replacement - Sony), and my wifes notebook (a Dell), as well as a new eMachines my kids use, and a couple of no-name PCs that I have built (based on ASUS motherboards).
Now, I've said a lot, and there are several topics that need to be discussed. But to get to a few points quickly, music from my Windows-based PC is all right, though it does depend a little on which system I chose to use. It sounds good, and most people who come over have no idea. They love the way it sounds. And generally, I have to agree. Some of the detailed passages or elemenets gets muffled or lost, that is those very subtle details within a song may get lost, or blended a bit more. But to get the music wherever I want, or a stream of songs in a "radio-like" environment, the PC has been my best setup so far. A couple of the older systems, and cheaper hardware do have some minor differences, more noise generally on very quiet segments.
Now, which format? I know there are a lot of other styles out there. I started with .WAV files. But to get the majority of my music onto the hard drive took up way too much room. Truly, about 600 MB for a CD, or 10 CDs for about 100 songs was about 6GB, and 100 CDs about 60 GB - I know, this is a bit too generic, but, it did use a lot of hard disk drive space. And though drive space is getting cheaper, there are still limits. I have nearly 1000 CD's, so this wasn't going to be an option. I know there is several file formats, namely AAC, OGG, MP3, WAV, and WMA. Without taking a lot of time to "sample" each format, I did know somewhat what I wanted to do, and that was to remain as close to the original source as possible. And learning a bit from the DVD-Audio world, I knew I wanted a "lossless" compression method, to minimize sound loss. Several methods are "lossy" (no, I don't want to get into technical details, just some of the reality of it all). So far, I have gone with WMA, there is an option in Windows Media Player 9.0 to record using a lossless compression method. And off the top, there doesn't appear to be a significant difference from the originals. (I have heard several of the songs I have in various MP3 formats, and though the higher bit rates sounded better to me, they still sounded different). As I began to mention previously, for general listening, background, doing work, these all sound better than the radio and do a great job of approaching good basic CD sound.
Now, I have talked about connecting directly from the PC to a stereo/home theater system using a mini 1/8 inch plug to RCA adapter cable. There has been another option that I have used successfully as well, and was QUITE surprised at how well this worked. First, the lead-in (sorry), but like many, I don't stay in just one room in my house, and working in the garage or outdoors has been another requirement (it's getting to be spring - lawn mowing - woo hoo - I have a commercial lawn mower and not quite 2 acres to cut, it takes me about a good hour to cut, that is, run the perimeter, cut the center, then run through with the line trimmer and blower as cleanup - and listening to a bit of music makes this task more pleasant).
Well, to the point, I also use an FM transmitter to distribute music around the house. To our bedrooms, to the garage, and for parties. PARTIES. Yeah, this was a helluva a lot cheaper and lest restrictive than working with a multizone system, most stereos and home theater receivers have tuners, so this was a good, inexpensive method of distributing the same source around the house. The quality is good, it is FM from a digital source. Think of it as a really strong FM station that plays only the music you like, with no commercials. The little, inexpensive transmitters around $20-30 don't work though, you need to spend a bit more, and you need a dedicated power supply (wall wart, no battery). I am using a Ramsey Electronics FM transmitter, they are just one of a few manufacturers, but is works well and I am very happy with its performance. They have units starting in the upper $30 range and going up to over $200, depending on your needs and quality. No, I don't expect high-end detail, just music, albeit, pretty good sounding music, more than just acceptable.
The final issue I am looking into is remote control. I have just started on that. I'm not sure of all of the digital audio receiver brands and options, but for now, I have a Prismiq Media Player. I received it for a birthday present a couple of weeks ago. I haven't had a chance to set it up as yet, but hope to very soon. It's primary roll will be to extend the PC music connection to our family room.
In summary, at our house we have a marvelous basement, 10 foot foundation, and the back and side walls of the basement are really normal framed walls on a minimal foundation - or knee-walls. And we have a raised floor, so our basement feels like the other floors in the house. My wife has a large work area in one corner that is open to our childrens play are. My office is located just off the play area. And in a corner of the play area is a small home theater setup - which is just starting to change again. And then on the main floor we have another home theater setup in our family room. Plus separate radios in our kids rooms and stereo setup in our bedroom. I have the PC music server located in my office, with a cable running through a wall to the stereo system, maybe 10 feet long. This sounds fine, better than acceptable. And for now, to get the music upstairs to the family room and bedrooms, the FM transmitter has been used. In the family room I will soon be using the Prismiq Media Player mentioned earlier.
A quick rundown of the overall brands I have used over the last year or two (yes, I know, some of you guys are really cringing at the thought of this - blasphemy, bwaahahaha - but hey, things change, and it's our job to find out what works best, help shape the future for something better):
PC:
ASUS
Dell
eMachines
Hush
Sony
Speakers:
Aerial
Linn
Paradigm
Meridian
Totem
Electronics:
Adcom
BAT
Integra
Jolida
Linn
Meridian
NAD
Sony
That's all, Todd
