If you are using the AN just with streaming audio and iTunes downloads, then it's no wonder CD's beat it. You are comparing Redbook digital to lossy MP3. On top of that, you are probably getting a lot more jitter coming off the computer (how are you doing that, by the way?).
How does the Sony/Modwright sound going into the Audio Note -- have you tried that?
How does the Sony/Modwright sound going into the Audio Note -- have you tried that?