I have two devices that stream internet radio in my rig. The first one is almost three years old now. The Escient Fireball SE80 streams internet radio. It has about 100 pre loaded stations. I must admit I never really explored these outside of a cursory glance.The quality did vary greatly on these sources...........but I can't say that I ever made an effort to compare which dac was doing the work (processor or source) and weather or not applying the dolby effects had much to do with sound quality.
The second source is my bluray player, the Samsung 2550. This streams Pandora radio(as well as Netflix) and, to my ears, the sound is superb, even with dolby algorithims! I have not done a ton of tweaking with this, but it sounds as good, or better than any FM broadcast. In fact, it sounds almost as good as the 320kbps files that are stored on the Escient's hard drive. I do listen to mostly pop music. The Samsung, and it's competition, the LG bluray, are excellent machines, and I would not buy a bluray player that didn't have streaming capability. I like my Samsung that much.
Thanks for the, as always, insightful and informative post, Dr. Mark.