nice setup. i have close to the same setup. from the airport express (wired or wireless), i go into a jitter reduction device before going into my dac. the jitter device made a big difference to the quality of the sound. now i have a jitter device before each dac in all of my systems around the house. the new airport express supports 802.11n now.
i use apple lossless on itunes from a mac mini. i use it for whole house audio. i also control the itunes on my mac mini with my ipod touch using remote buddy.