OK - anyone who's interested here's what i just did in pursuit of best quality playback... as i commented, i noticed that WAV was 'highest quality' so i imported some CD tracks making up a particular playlist with wav setting. then i transferred those at ATRAC 352. so i had one nwa1000 playing this playlist with these settings, and another nwa1000 playing same playlist on my previous setting - transfer was the same, but the original content had been imported on AALossless @ 352. i used sennheiser cx300 phones on both players. i've gotta say, there wasn't a lot in it, but certainly i could here less background hiss between tracks on the wav original content version. i really like these cx300's, but i guess the better the phones you're using, the more you'll be able to appreciate the difference. i also guess many people might know all this already! so this is just for the benefit of folks like me who know next to nothing about this kinda stuff... as a side comment; one of the nwa1000's i picked up in Japan - the other is a UK/EU model that i'd taken the volume limiter off - so both have no vol. limiter. For sure the Japanese unit delivers noticeably higher volumes at same volume setting. I also noticed transfer speeds to the Japanese unit was a lot faster. As far as i can tell all settings are the same on both units and in SonicS., so who knows what that's all about...