Airport Express wav file vs CD played thru iTunes


I just bought an Airport Express and have it connected to my Primaluna integrated without using an external DAC (for the time being).

When I stream a wav file from iTunes the sound quality is noticeably worse than the same track played on a CD through iTunes. The wav file sounds compressed and very muffled. I would expect the quality to be equal to the CD. I only did this as a test and don't expect to play CDs through iTunes on my laptop streaming to the AE.

Will an external DAC "correct" this problem? Or is the wav file encoder for iTunes the issue? Or maybe something else entirely?
arm
I think you need to use lossless/ACC files to get the same quality or close too as a CD. WAV, MP3's are compressed, look at the file size btw the two.

We have been ripping CD at lossless and yes they take up a huge amount of space but in comparing them to a CD the sound is almost the same (qualifying a bit)
I'm streaming wirelessly from iTunes on an iMac G5 through an Airport Express connected by glass toslink to a Benchmark DAC1 and then to my amplifier.

WAV files, which, as Arm said, are uncompressed, Apple Lossless files and AIFF files, which are what you find on CD's, are indistinguishable from each other. MP3 and other compressed formats don't sound as good, though MP3's at the higher bit rates aren't bad.