My main concern is sending audio files wirelessly to the Oppo for playback. Does the included wireless dongle on the Oppo allow this?
Yes. While I have no experience with Oppo equipment, I'm not sure that it would be as daunting as Willie is anticipating. See page 44 (pdf page 48) of
the manual. Note in particular the third method that is indicated:
Accessing a SMB/CIFS [e.g., a Microsoft Windows Network] client: the player can directly access files shared through SMB/CIFS clients over the network, as if accessing an external USB hard drive. Most computers, especially those installed with Windows, already have an SMB client embedded. Please refer to respective OS instructions to set up the SMB/CIFS shared file/folder.
So if you have the music files on an external USB hard drive connected to the laptop, it seems to me that you would just have to set the properties of the folder containing them to allow them to be shared on the network.
Should I just upgrade the internal hd on my laptop to a 1TB unit?
No. For a variety of reasons it is generally considered highly preferable to have music files stored on a different drive than the one containing the operating system and program files.
Do external 1TB hds exist that are wireless or do they all connect via hardwire into the USB port?
Generally only NAS-type devices will provide wireless connectivity for hard drives. Plain old external hard drives connect via either USB (most common), or other wired interfaces such as Firewire, eSATA, and Thunderbolt. Some external drives provide more than one of these interfaces.
Ideally, I'd like to locate an added hd next to the Oppo in my rack.
Given the foregoing, you could either connect an external USB hard drive directly to the Oppo, and play the files on it via the Oppo, or you could connect the USB hard drive to the laptop and play the files on it via the network wirelessly. Or, since you would have the files stored identically on at least two drives for backup purposes, you could have one drive connected to the Oppo and one connected to the laptop, and play from either.
Using a high quality USB-to-S/PDIF converter between the laptop and the Oppo, as Steve suggested, is another alternative, that I suspect would give excellent results but at considerably greater cost. The tradeoff of cost vs. benefit between that and the other approaches would involve differences in the sonic performance of the Oppo through its various interfaces, about which I have no particular knowledge.
Regards,
-- Al