Though this has been explained earlier, I'm quite happy to answer your question. Itunes 7.5 is not bit perfect and uses OSXs sample rate conversion even when the audio midi settings are set correctly. This is new in 7.5. I use 7.4.
I disagree, as do many others. Can you give us an idea of where you are getting this information to support your opinion?
Recommended Setups from Benchmark Media Systems:
Optimal settings for iTunes differ depending on the capabilities of the audio output device being used. The following recommendations are for the Benchmark DAC1 USB and other devices whose computer interfaces are capable of 96-kHz, 24-bit operation.
The Volume Control in iTunes v7 is very-high quality under both operating system. It is very well designed and operates at 24-bits for audio devices that support 24-bit operation. The end user should not hesitate to use the volume control in iTunes 7.x under either operating system.
For users of iTunes under Mac OS X with 96/24 output devices, we offer the following two different, recommended solutions:
The Set It And Forget It solution for iTunes 7.x: Before opening iTunes, set the sample rate of CoreAudio (in AudioMIDI Setup) to 96 kHz. Do not change the sample rate of CoreAudio unless iTunes is restarted after the change is made. This solution will prevent CoreAudio from applying SRC, as the quality of CoreAudios SRC is horrible. Also, by having iTunes locked at 96 kHz, all audio with sample rates below 96 kHz will be up-sampled to 96 kHz. This will cause virtually no loss in sonic quality, as the quality of iTunes SRC is very good virtually inaudible. Also, by avoiding down-sampling by iTunes, this setting will never result in a loss of bandwidth (except with sample rates greater then 96 kHz).
The Bit-Transparency For Each Sample Rate solution: *CAUTION: This solution is rather cumbersome, offers virtually no quality improvement over the first solution, and can easily be mis-configured which can cause severe distortion. Before opening iTunes, set the sample rate of CoreAudio (in AudioMIDI Setup) to that of the audio you will be playing. Do not change the sample rate of CoreAudio unless iTunes is restarted after the change is made. This solution will prevent CoreAudio from applying SRC, and avoid SRC by iTunes for all audio with the same sample rate at which iTunes is fixed.