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Some of the concerns seem more sensible than others. Lossless audio I'd put fairly far down the list: in blind tests, nobody, not even audiophiles, can tell the difference between high-quality mp3s (e.g. lame -v0) and FLAC.
There are two aspects to this problem. The first has been solved. 256-bit AAC is indistinguishable from uncompressed audio. One might argue that improvements could be made in the base rates: going 20-bit, 96Khz. Even that, is almost not enough to qualify as a "marginal" improvement. None but the best ears can tell any difference at all.

The second is a rather vexing problem: The crappy quality of DA convertors. While Apple has done a service by switching entirely to high-quality AAC in iTunes, their iPods have been a mixed bag. They skimp on the DA circuitry. The Macbook Pros are even worse. Horribly noisy audio output.