Re Musher's question:
Isn't that where the surround processing of the Lexicon would come in? If iTunes really is offering a less or non compressed option, wouldn't the Lex have a better chance of turning it into something closer to a DVD-A than a CD? Wouldn't it at least sound better in the Gen? Theoretically?
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The Lexicon's surround processor just takes stereo sources and expands it to simulate surround. The Apple Lossless is just taking an already lossy source (CD) and compressing it without losing more. I have a dvd-audio sample disc which actually has various forms of some songs for comparison. It has a cd quality followed by dvd-audio quality.