As regards the ID40 (and the MS600 for that matter), they are essentially Network Players in that they receive the FLAC file and decode it internally. They take the FLAC file over Ethernet in the same way as the SB / Touch / Sonos clients do and then decode from Lossless to PCM internally. It is NOT "some sort of PCM uncompressed format".
I don't know how you know that. On reflection my statement that the FLAC decode is done in C15 or Ensemble is an assumption. I don't think any of us
know whether the FLAC - PCM decode is done in the C15/Ensemble or the ID40. But in any case for the purposes of sound quality, the point is moot since the connection between the source and the ID40 is ethernet and whatever files are sent are sent in asynchronous ethernet packets - ie jitter-free (or strictly speaking jitter-meaningless).
I cannot say for sure if the ID40 Card itself or the 861/808 is doing the FLAC Decode as I never got an answer to that question. The Decode happens internally to the MS600
How do you
know that Sooloos sends FLAC files rather than decoded uncompressed files on the network?
It's also the reason why they say that EVEN IN THE SAME ROOM, a C15 to 808/ID40 will sound superior to C15 to 808 via Speakerlink / PCM.
That is an entirely different question which is what I've been pointing out. Here you are comparing two methods of getting data into the 808.3 - asynchronous ethernet versus synchronous clocked SPDIF or SL. It's got nothing to do with what file types are being transmitted and where they are being decoded to an uncompressed PCM like WAV.