I'm using my Xbox 360 to play music off of my computer's hard drive (WMA lossless), and I can't really tell a difference between it and the CDs, but then I've never had an "audiophile" player with Burr-Brown or Wolfson DACs (or whatever else is supposed to be comparable). The Squeezeboxes have Burr-Browns, right? I've always been interested in hearing one to see if I could tell a difference at all.
For me, the Xbox 360 works well enough, but sometimes I wish I could choose my music based on the folder it resides in. I hope they keep refining it with each dashboard update.
I'm not paranoid enough yet to have a backup of my music. I keep it all on one external hard drive. I'll probably end up regretting it.
