[krohm]

 
maybe if i had put a question mark at the end instead of ... u may have understood.  im just learning all this so if im stating the obvious it means ive just understood it for myself and wanting to verify/clarify further...
 
was wanting to try and understand how the source component if it is digital really has an affect on the quality of the output... you say no, it seems it cant if it is digitally transported losslessly.   
 
so it seems if it is digitally transported to a dac then it really is up to the hardware from the dac point onwards that is going to determine the quality of the output... not the way the dac gets it (if it is digital/lossless)
 
gives me an understanding on how i can go about approaching my audio now.. 

 

[BlackbeardBen]

Ah, but the transport can and does make a difference.  How much of a difference, and whether you can detect it is another story.
 
CDs are a great example.  Nobody's CDs stay entirely scratch-free.  Even those that are new and almost scratch-free are still subject to faults in the mechanical parts of the CD player - the drive and the laser assembly.  I doubt anyone can really tell the difference with an adequate CD drive and a clean CD, but it does make a huge difference for scratched CDs.  More accurate laser assemblies (both mechanical and optical) and good interpolation schemes can make a scratched CD playable where it wouldn't otherwise be.
 
Outside scratched CDs, I don't think there is a notable difference.  Even oversampling/upconverting is controversial.  Hard drives and flash drives won't ever have the same problem as optical media, so the choice of the transport really shouldn't make a difference unless there's so much interference that it's affecting the digital bitstream.  I couldn't say if that's ever a problem.