I appreciate the suggestions. I did try out fluke but I think if I was going to embrace appleTV or even itunes I would just bite the bullet and do the conversion. I'm on the road a lot so I'm sure I could batch job it and check remotely while I'm gone.
Given what I'm envisioning for the living room (with the M80's) and my LCD, it would be pretty slick to have itunes running through there.
In the end it doesn't matter as long as it's lossless - I'm just being anal retentive.
As far as FLAC sounding better - not sure if you mean compared to ALAC or MP3, but if you mean MP3 and you've got axioms I don't see how you won't notice a difference. The sound stage is much broader and vivid (obnoxious words I know...but I never got them till I bought some "real" audio gear like this stuff).
I know there is 'science' to stuff the music that gets cut out with mp3 back in, but with well recorded audio, I don't just don't see it being the same and I enjoy lossless much more.
Which of course is all that matters in the end for any of us
-Nick
