Ghunter's post has some useful clarifications. Also, Airport Express does not "convert everything to Apple Lossless." iTunes converts everything to Apple Lossless, _if_ it is being used to wirelessly stream audio data to AEx. But this is kind of academic, since, as Ghunter says, AL has been shown to be a true lossless format.
I think the wireless technology combo of AEx and Apple Lossless works great. The ergonomics/convenience of using iTunes and being wireless is terrific, so that's where my vote goes. I did become curious about whether the optical feed from my AEx to my DAC was a weak link. I ended up purchasing a Monarchy Audio Upsampler DIP, which of course goes way beyond just substituting a coax feed for the optical. The results are noticeable and worthwhile, even though I am using a good quality DAC (Northstar Model 192) that is supposed to have very good jitter reduction circuitry of its own. It makes sense to me that jitter reduction can be a cumulative endeavor, and I think if you are using a modest source (AEx, DVD player, midfi CDP, and I would imagine devices like Squeezebox and Waveterminal), lightening the jitter-reduction load for your DAC by using some kind of anti-jitter box before the DAC can be worthwhile, especially given how inexpensive some of these anti-jitter units are on the used market. However, I don't want to sound like one could not possibly be happy without making this extra investment. I was very pleased, very satisfied with the sound from my AEx running straight into my Northstar, before I added the DIP. It sounded great; I didn't find it deficient at all. I just got curious.
"Coaxial methods being preferred by many as the better way to stream digital info"
With jitter correction circuits you won't notice the difference. The bottom line is that the quality of sound you get out is in direct relation to the quality of the DAC. Everything else in the middle is pretty much irrelevant except when it comes to convenience.
I think the wireless technology combo of AEx and Apple Lossless works great. The ergonomics/convenience of using iTunes and being wireless is terrific, so that's where my vote goes. I did become curious about whether the optical feed from my AEx to my DAC was a weak link. I ended up purchasing a Monarchy Audio Upsampler DIP, which of course goes way beyond just substituting a coax feed for the optical. The results are noticeable and worthwhile, even though I am using a good quality DAC (Northstar Model 192) that is supposed to have very good jitter reduction circuitry of its own. It makes sense to me that jitter reduction can be a cumulative endeavor, and I think if you are using a modest source (AEx, DVD player, midfi CDP, and I would imagine devices like Squeezebox and Waveterminal), lightening the jitter-reduction load for your DAC by using some kind of anti-jitter box before the DAC can be worthwhile, especially given how inexpensive some of these anti-jitter units are on the used market. However, I don't want to sound like one could not possibly be happy without making this extra investment. I was very pleased, very satisfied with the sound from my AEx running straight into my Northstar, before I added the DIP. It sounded great; I didn't find it deficient at all. I just got curious.