Apple Airplay Sound Quality


What is the potential for sound quality via Airplay? Is this essential WiFi? Or Bluetooth? What technology is being used and what are the limitations? I've reviewed all the material I can find and don't see that information (in my own non-technical language, anyway).
Thanks,
Art
artmaltman
The results of the quick test I took was as follows.

I sent a 24/96 file via Airplay to my receiver with integrated DAC, an HK 3490. The end result was the display stated the signal was 44.1Khz PCM. I can only assume that there is some down sampling during the process, but I do not know exactly where.

I will prepare some more testing to gain more clarity on the matter but I would not be surprised if what I found was additionally confirmed.
I thought the stereophile test measured large amounts of jitter?

I know my 840c simply doesn't like the optical input while the analogue output of the AE is only OK. But, in this case convenience trumps ultimate quality.
My lossless files transmitted in this fashion easily best the MP-3 / 320 or so stuff off the small dish / sirius feed.
http://www.stereophile.com/digitalprocessors/505apple/index.html

Look at comments associated with 'figure 7' for detail
There are two traces on that graph and one is for the analog outputs while the other is for the Musical Fidelity X-DAC V3. The only thing I am not sure is if the MF device is using something to reduce jitter. He does note that it performed better then his RME card from his computer.
Provided you happen to have an Apple Airtunes enabled device, then you should be able to get cd quality from it. The new Apple TV @ $100 takes an Airplay stream and is a 16/48 device making it cd quality. It's wifi...Apples own proprietary system. The beauty of it is using a streaming device such as an iPad to stream music wirelessly from the web and then stream it via Airplay to your hifi. It's got potential.