Hi Marco, I'll try...
Whilst the data being transmitted is in 'File' format, eg the compressed FLAC file, or the WAV file etc. we are still in the realms of IT, I.E. a reliable File Transfer(TCP/IP), so there's all of the standard FTP protocols in place, so the file received by the player is bit for bit the same as the file sent.
Ultimately the 'File' will need to be converted to a data stream that can be consumed by a DAC, in this case PCM (pulse code modulation, DSD is a newer format), to my mind this is where we start moving out of the IT world and into the analogue world, where interference can occur, and bits are no longer bits etc. The process of converting a 'File' to a PCM stream is transcoding.
With LMS (logitech media server) running on my NAS, I can choose whether to transcode to PCM at the Server running on the NAS, or at the player/Pi end, I choose to transcode at the Pi end, firstly for network efficiency (I'm only transmitting a small FLAC file not a 2 * 1411 Khz PCM stream), and secondly I want to decouple my player from the NAS, all it does is send the unpolluted FLAC file.
In the earlier days of Squeezebox, when the players were a much lower spec than a Pi, some people preferred to Transcode to PCM at the server in order to take the load off the puny player (the CPU on the early SBs is a fraction of the Pi's power)...and felt they gained an improvement, hence this option exists in LMS.
I can't find anything about the streaming protocol used in Moode, but it would appear that Roon streams in PCM by default, something to do with synchronisation issues...
However I would like to be wrong in this instance, the idea of improving the SQ of 3k FLAC cd's with a relatively inexpensive NAS/PSU is very appealing...but I can't see how with my streaming architecture