I am using Hoster by
www.mtu.com and am very happy with it. I can play a karaoke song from a cd, or the hard drive, and can't hear any difference.
It all has to do with the software, hardware, and the compression. If host with a cheap program like sax & dollies, or winamp, you get what you pay for. Hoster is a Professional KJ hosting program, and delivers. it runs the rotation for me, makes the songbooks, and keeps the playlist.
Whatever you use, if you ever go digital, you will never go back to manual.