I have two Squeezebox Classics in my system and I think they are great. Anyone interested in these devices and their capabilities really should check out the Squeezebox forums at
Squeezebox : Community : Forums. There is a plethora of information there to answer most of your questions. The level of helpfulness there is very high as well. I would also suggest also that you read up on the soon to be available Squeezebox Touch, if you are interested in hi-res playback and you don't want to drop $2000 US on a Transporter.
Several people on this thread have also mentioned the Apple Airport Express, and I think that is a great solution as well. It's very easy to set up, and use. The only downside I see is that you become pretty dependent on iTunes and Apple's way of doing things. I prefer FLAC for lossless compression because Apple doesn't own it. If I wanted to play lossless music through an Airport Express, I would have to transcode it and maintain two copies, or tie myself to a proprietary format (ALAC). If you are lucky enough not to notice differences between lossless and lossy compression, and you don't mind using iTunes to manage your library the Airport Express solution is a lot easier, IMO. Since the original poster mentioned hi-res, I'm not sure that is the case here.