Sounds like we have similar situations. The Soundblaster system has trouble with files that are ripped at high bitrates; it just won't play them. This is discussed on their website, where I think they recommended a bitrate no higher than 192. Also, I think the files have to be mp3 or windows media. So for this system, you have to sacrifice some audio quality. However, as I use it just for background music while doing dishes and whatnot, I find it acceptable.
Actually I like the system quite a bit. It's great to be able to access your entire collection. Also, the remote control is radio frequency, which means I can control the unit, which is in the living room, from the kitchen or wherever else I happen to be. The remote also has volume control, which is handy. We're doing lots of work around the house these days (painting, etc), and it's been great for that.
But it's definitely not an audiophile system. For serious listening, I use my dedicated two channel system.
I think there are other solutions, such as using the Turtle Beach system with a wireless bridge, but I don't know much about them.
I'm happy to answer any other questions that you may have.