Is it the transport or DAC that enables HDCD/Red?

K: you need to add the "www."

RE: Bob's comment about MS killing the technology. I don't know if that is so or not. but what I do know is that Keith Johnson's (co-inventor of HDCD) ReferenceRecordings site seems to be doing very well and of course all the issues are in HDCD:
http://www.referencerecordings.com/default.asp
and there's a new format on his website you can read about (I haven't yet) called HRx.

I just wish he'd bring back RR LP's ;-)
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Nsgarch - thanks for the info. HRx is much cheaper than SACD and contains physical disk - which I like. It is one more argument to connect computer to my Benchmark DAC1. I wouldn't mind buying few record even if the format won't become popular. My DAC will be always able to play it. I suspect that physical disk is supplied to be inserted as a proof of ownership - otherwise how could they stop pirating.
It might be a little inconvenient but I need some form of exercising anyway.

Rameau in HRx looks interesting. I have "Une Symphonie Imaginaire" by Minkowski and his guys (excellent sound and recording).

I want to thank each of your for your generous response here. As you can see I am not very familiar with this technology. However, I have been doing some research and of course I have learned much from reading your comments here.

I do understand that there are other than HDCD or Redbook CD's available. I have also read something about DVD-A disks. I guess my question should have been ... Can my newly acquired Parasound 2000 transport and basic DAC be expected to decode other than Redbook CD's?

It could very well be that there are some Redbook CD's that are just as sound worthy as HDCD's. As stated earlier I have many Redbook CD's but have never heard them played on a really good system that includes a good CD transport and DAC. Here are the primary specs for the DAC: AD1853 for digital/analog conversion and can support up to 192KHz/24 bit sampling. Digital input signal sampling: 32K to 96K PCM format.

At any rate what I will look for is a list of "Redbook CD's To Live For" (smile). I am sure there are some really great sounding Redbook CD's tht I have not been exposed to yet. I just want to experience the best sound I can get from the many CD's I have as well as add other formats that can be decoded on my transport and DAC. Thanks again everyone.

Kijanki: Sigh..., of course dynamic processing is part of the picture, but you left out much of the article and only picked out the paragraph that seemed to support your statements.

For the rest of the story:

"Dynamic-decimation filtering is HDCD's response to the well-known problems inherent in filter design for digital conversion systems where the Nyquist frequency is only slightly above the range of human hearing. "A filter designer who has to make a 'brick wall' filter at 22 kHz is confronted with conflicting requirements," Ritter explains. "You want to have flat frequency response out to at least 20 kHz, but you can't have any energy above 22 kHz or you will get alias distortion. This requires a very sharp multipole filter with a very steep transition between the passband and the stopband, which has a number of distortive effects on the signal. It smears transients and causes significant ripples in the passband. If you try to simplify the filter, then to avoid totally unacceptable aliasing you have to start rolling off at 13 to 15 kHz, and even then the signal will not be completely cut off by 22 kHz."

Ritter describes the HDCD approach to this problem: "We slightly delay the 88.2kHz signal, not enough to cause any sync problems but enough that we can do a continuous Fast Fourier Transform. The resultant information is digitally analyzed in real time by an algorithm that determines, based upon a model of the mechanics of hearing and psychoacoustics, what is perceptually dominant in the signal from instant to instant. And that information is used to optimize the decimation filter. One moment you might have a sudden sharp transient, so it uses a filter with minimum time dispersion to pass the transient cleanly. The next instant, there might be a cymbal crash, so it uses a filter that minimizes alias distortion. All the filters are the same length, so you are not getting a phase shift as this is going on."

Another element in the process of downconverting for CD is word-length reduction to 16 bits. "We never simply truncate," Ritter says. "And with the introduction of Version 2.0 of the Model One at the end of 1998, available as a flash-ROM upgrade to existing units, we now have a palette of four 16-bit dither options." The dither and the dynamic decimation together, Ritter believes, add up to a big improvement over typical CD sound. "The reduced distortion-sharper transient response and reduced aliasing-becomes part of the digital recording and will be heard on any player, whether it has HDCD decoding or not," he says. Nonetheless, the optimal playback setting is one in which the playback filters are matched to those used in recording. To achieve this, the Model One hides control information in the signal that tells the HDCD decoder which filter to use. This data is encoded as a pattern in the dither used for word-length reduction. It occurs only 1% to 2% of the time, and the company says that extensive testing has shown that it is inaudible."

Note that all this processing takes place on the encode side.

Ghostrider - I read this before but have hard time to understand importance of it and also why wouldn't this be applied to regular redbook CD in downmixing. This is more of preprocessing technique and has nothing to do with HDCD. If I learn that, for instance, TELARC is using similar technique to downmix their redbook CDs I wouldn't called TELARC CD a different standard. TELARC currently uses DSD recording format/technique - does it change CD standard?.

I'm also not certain how much it affects the sound. There is probably very little energy above 20kHz and it is already filtered out in downmix processing. Whatever left above 20.5kHz is folded into passband starting from 0Hz but people who own NOS players don't complain. They even claim better sound.

So - now they claim that what differentiate them from just simple downmixing process is that they hide somehow information about status of adaptive filter at given moment in the music itself. Hiding it in the lowest bits while it's used only 2% of the time maximum (as they claim) is strange. Maybe I'm slow to understand it, but if they used adaptive filter in downmixing why do they need to match it in playback? They stated before that when high frequency info was present (like cymbals) they applied sharp antialias filter and when it wasn't present they bypassed filter. All this was done to avoid using sharp antialias filter in the player. Fine, but now there is no high frequency above 20.5kHz in the mix and even phase is the same for all signals - I don't understand what they are matching (and how)? Oversampling and Bessel filtering in my DAC sounds simpler to me.

Error correction code (Reed-Solomon) is pretty weak and the player bypasses the data with the wrong checksum. That would mean that adaptive filter info hidden in the lowest bits (as a pattern or a sequence) can be lost (fingerprints or scratches). It cannot be that important.

Again - I don't question that it sounds great. I'm just trying to understand. Perhaps the fact that it is not very popular has nothing to do with technical merits (SACD was killed by greed in my opinion).