Meridian, with the ID40 card for the 861/808, have gone one better than that and put that "Network FLAC File Player" into the Processor itself. Getting the Lossless File (rather than PCM) as near as possible to its eventual Decoding has Jitter minimization advantages over PCM. There's not a lot I like about the whole Sooloos Architecture, but that's certainly one of them
I think it's fair to say that the same principle would hold thru with e.g. SB / Touch / Sonos clients, i.e. let the Client (usually in Rack near the Processor) do the FLAC / ALAC Decoding, rather than letting the (usually) remote server do it
This shows you still don't understand how things work.
The link between SqueezeServer and SqueezeBox is just like the link between Sooloos Server and ID40. Both twoway packet network based and buffered. NO JITTER. The FLAC vs PCM is a just a FORMAT issue and CPU load issue. It has nothing to do with jitter.
Sooloos could send FLAC or PCM to ID40, it would be the SAME, no jitter.
Jitter does not come into play until it starts getting clocked out sample by sample (LOOOOOONG after WAV vs FLAC has been dealt with).
Having a SqueezeBox near Processor will NEVER be ever close or similar to an ID40. Regardless if it's FLAC or PCM.
Because the SqueezeBox will always be limited to SPDIF communications where the jitter realm kicks in. That jitter realm can be controlled INSIDE the 861v6 and NEVER use more jitter prone SPDIF. SqueezBox will always be stuck with more jitter prone SPDIF.
Again nothing to do with FLAC vs PCM and who decodes to decode it.
If either CPU on server or client is overloaded and asked to decode FLAC when it does not have bandwidth or network is marginal then you will have UNDERRUN. GAPs in play back. That is NOT JITTER.
What you are confusing is a Bitstream in PCM vs a effectively WAV FILE.
SqueezeServer sends a FILE, be it a FLAC, WAV or MP3, no matter what (turns out to be pieces of files but it's a FILE).
Then it converts it to a PCM Bitstream, no matter what it started out as.
The little bit of decoding a WAV vs Decoding FLAC and who decides to do it does not change what happens to the PCM Bitstream which happens LATER and that's when jitter kicks in.
That later step of PCM Bitstream happens inside ID40/861v6. Regardless if it's sent FLAC or PCM.
In fact I suspect ID40 does not decode FLAC. But it does not matter. It does not change anything.