In order to listen to music, you need:

music source --> amplification -- speaker wire --> speakers [+ some way to control it]

In a traditional multi-room music configuration, you still need the same set up, but you will likely have more powerful central amplification and longer speaker cable runs to get to each room. 

Several potential problems arise from this type of configuration:

• Cable must be run (sometimes great distances) to feed the speakers. Additional amps may also be needed to boost the signal so that sound quality at the speakers is within tolerance.
• If you have a CD you want to place in a player, you have to walk to the rack location to insert it.
• Analog audio signals routed to these speakers does not reproduce sounds exactly; whereas, digital signals do. Analog signals are also subject to interference.

Today, several manufacturers are tackling these issues with a distributed system.  Colorado vNet, NetStreams, Embedded Automation's mPanel, Russound and others are placing the amplification closer to the speakers and using shorter speaker cable runs.  They are also connecting everything over CAT5 to enable the digital music to travel from the music source to the amplification.

What does this mean for the consumer?  According to NetStreams:

• By pushing our technology to the edge of the network, we’ve eliminated the need for costly matrix switching and large central amplification. Both are required to push analog signals great distances to the speakers.
• Sources can either be placed in a central cabinet or at the zone where the keypad and speakers are located. This is especially important for portable devices such as MP3 players. You can easily add powered subwoofers or more speakers (something that centrally-based systems do not facilitate).
• When running speaker wire to the speakers, analog signals endure great signal loss and are susceptible to an ever-increasing barrage of interference. This creates distortion and reduces overall sound quality. With the NetStreams Musica or DigiLinX^™ systems featuring the amplifier installed in the zone, you greatly reduce your risk for higher distortion.