Time to read:
http://yabb.jriver.com/interact/index.php?topic=81982.0
Pertinent info from above:
"Technical Considerations
With a modern computer, playback of a standard CD-quality file will have the fully decoded file in memory in around one second.
Memory playback will use up to 1GB of memory for cache (capped at 80% of available system memory to avoid swap usage).
In some cases, the work of decoding and caching a file quickly as a track starts could lead to other problems. For example, when playing over Wi-Fi some machines exhibit high resource usage when reading a file quickly. This resource usage as a track starts could lead to audio playback glitches.
Some files like DSD played as PCM have very large decoded data so that they might require more memory to cache than (most) any system has. In these cases, the program will cache 1GB, play it mostly out, then cache another 1GB, etc.
With memory playback enabled, the player will no longer report a real-time bitrate (ie. 872 kbps) during playback. This is because asking the decoder its current bitrate is not possible when the decoder has finished with the current track completely in the first couple seconds of playback."