With that sorted though, connectivity is provided by digital coaxial and optical, stereo RCA, an Ethernet port, 802.11g wireless, USB, an SD card slot, and a headphone jack. Serious audiophiles will want to connect the digital output to the outboard equipment of their choice, but the onboard DAC isn't too bad: according to the Hi-Fi Vision forum the device uses the budget AKM AK4420 DAC capable of 24-bit/192KHz conversion.
In terms of digital entertainment we are at a tipping point, with more and more streaming services coming online -- at higher quality than MP3 as well -- and the need to keep your music on your hard drive will soon disappear. The beauty of the Squeezebox Touch is that it can seamlessly combine online sources and your private collection. Whether it's the use of the "favorites" button or creating dynamic playlists, it's easy to blend Spotify in with your lossless, 24-bit FLACs, and this is the device's greatest strength. While it's currently up-to-date in terms of services it would be great to see it add further apps such as Google Music and Amazon Cloud Player for futureproofing.
I found the best control method was with a tablet -- whether Android or iPad -- with the left side dedicated to your library and the right side for cover art and playback controls. Holding down an item on the tablet brings up a context-sensitive menu (Favorite, Play Next, Play Last, and so on) that doesn't appear on the less-flexible PC/Mac Web controller. One problem I encountered though was that the Squeezebox app on the Sony Tablet S was very slow to browse through large collections while on the iPad it was silky-smooth. As an addendum to this, the software is prone to slowdowns; a good way to minimize bottlenecks is to use wired connections and a dedicated PC. While I used an officially supported Netgear ReadyNas Duo in my testing, I'd suggest considering upgrading to the more powerful ReadyNAS Ultra series with its Atom processor.
Though most people won't use it, the touch screen itself is also fun to use, with a fast interface and fast scrolling. Swiping left to go back is natural and the screen is precise, making typing easy with keyboard search.
The Logitech software is quite smart and if you don't scan your library that often, Folder view is best, as it uses the well-established Artist Name > Album folder format to guess file names when it comes across files without ID3 tags. In comparison, the Sonos doesn't read the raw folder data, just its own cached version of it, and if it can't find ID3 tags -- for example on new WAV files -- it skips over them completely.
I used a number of different outputs for testing the Squeezebox, including the Cambridge Audio DacMagic Plus, the Denon AVR1912, and the Marantz SR5005. The first thing that I impressed me was how good the onboard DAC of the Squeezebox sounded, and I found that there were only incremental benefits to using the $600 outboard Cambridge Audio DAC.
Whether it was the deep bass of a dub-step track or the extra vocal details and treble nuances that well-recorded 24-bit music can bring, the Logitech's analog output sounded great. Using the DacMagic Plus enabled more control over the sound and provided more precise stereo images, but the differences weren't as great as you'd think. Audiophiles will probably want to use an even better DAC and the Logitech's high bit-rate support will enable the sound quality to scale very well.
While the Squeezebox only supports 96KHz, it will play back higher sample rates and halve them. Our 192KHz FLAC test file played back fine at 96KHz, and remember that bit depth (24-bit in this case) is more important to sound quality than sample rate. I have not yet tested the 3rd party output upgrade.
But you may find that you're happy with just streaming your music, and with support for Spotify's 320Kbps Ogg Vorbis tracks you may not miss lossless music at all. Whether it was streams of Jethro Tull's "Thick as a Brick" or the haunting sounds of Perfume Genius, the Logitech was able to deal up plenty of detail via both the analog outs and the digital connection.
If you haven't gathered by now, the Logitech Squeezebox Touch isn't for casual users: if you don't know what a NAS is, for example, don't buy this product. If you want something easy then get something from Sonos, it'll be fantastic. If you are a hi-fi enthusiast, though, you'll find plenty to tinker with in the Logitech Squeezebox, and despite some occasional server slowdowns, it's a great product to use.
Updated 6-19-2012: Have added support for Windows Media Audio Lossless