Im just guessing, but im pretty sure the Thumb drive reads the information faster than the cd. Not sure how that factors into the reproduction of the file played tho. Another thing is that i agree with you, however when i plug in my iphone the quality goes back down although its still a usb connection. So that negates the above thought. edit: I answered my own question lol. Think of blu-ray and regular dvd's. So some blu ray players up-convert data, maybe the HU is the same, IDK all guesses