I wasn't commenting on what was inferior/superior, I was simply pointing out that this claim was wrong, " but only ALAC will actually use the DAC in the P99RS for conversion." Any digital format that is sent to the P99RS will use the DAC in the head unit.
I agree though that ALAC is the way to go, that's what I use, but to say that ALAC is the only file type that will go through the P99RS DAC is simply wrong.
Additionally, in modern equipment, the DAC is not going to be the weak link. I agree that avoiding multiple conversions is ideal, but the DAC in an ipod is going to be very respectable, and even if it measures more poorly than the DAC in the P99RS, it isn't going to be a problem.