ok well im happy with the answer. It confirms my hopes that the Apple TV is not doing the conversion, but my receiver, which is what I wanted. When xbmc releases their next stable release with rewritten HD audio engine, it will be sending out my 24bit FLACs in their true 24/96 state as 24/96 PCM straight to my receivers DAC
I didn't want my Apple TV hardware getting in the way of this.
I don't know what kind of quality my receiver DAC has, but it was a midrange receiver so im hoping its ok when compared to a dedicated external DAC. It might not be upconverting to 24/192, but is that alone going to make it sound great when the input is only 16/44 FLAC?
I still wonder why my Pioneer DV656a sounds so good though compared to my receivers DAC. I thought they were equivalent. Connected the Pioneer using Argon cables on 2ch. Playing SACD DSD stream on 2ch section only to receiver.
I know it's not a like for like comparison, but I ripped the CD section of the SACD to my server as FLAC (figuring that the mixing of the master had more bearing on the SQ than the fact it was SACD vs CD format), and played it back through my Apple TV to receiver. I also played the SACD as DSD 2ch from my Sony DBP player using HDMI to receiver, and that it where I notice the biggest quality drop (larger than with the Apple TV). My Denon AVR-2310 receiver has the same settings in the menus for all channel inputs.
So im playing the same 2ch DSD disc section on both players, but one uses its own DAC, the other uses the receivers DAC. Is it just the DAC that is affecting the sound quality in this case or is it the whole hardware component package (pickup, transport etc) of the Pioneer vs the Sony that affects the output?