The title may come across as dangerous, but when the software works okay there is not so much to it. Just read on.
The Playback Drive(/Folder) is a setting in XXHighEnd that adds another dimension to the plethora of "where playback happens makes a (SQ) difference". The Playback Drive is a very explicit means though, and it is created to eliminate the
source of SQ differences for the same files, but played from another location. This includes FLAC files which (always) convert to WAV, native WAV sounding perceivedbly different.
The Playback drive is to be considered as a general playback source to which all goes - and ends up in the very same way.
BUT :
It will still be your Playback Drive itself which determines the sound.
For the Playback Drive anything can be denoted, from a normal spinning disc, via an SSD, to an USB stick or SD Card. And watch out, even where the USB stick is stuffed in can make a change in SQ, like to which SATA controller (etc. ?) the spinning disc is connected to may make a difference. The point is though : once this best location has been determined by you, this variable of "source" to SQ changes, should be out of the equation.
Besided the above, playing from the Playback Drive (and only from there !) implies special SQ treatment as well. So, things happen which do not happen when directly playing from your music disc or even via the Copy to XX Drive setting. This application is a "one means" only at this time (0.9z-7) but it is subject to further treatment in the future. Also, at this moment what is applied was applied by your "developer's" settings, while in the future it could be your own.
Now the more dangerous partThe Playback Drive is not allowed to contain anything but a folder name to your likings (it works without folder name as well). This means (and most certainly implies) that whatever else is on there, will be erased when all the built-in checks for anything on the disc/medium subequently fail. This refers to "when the software works okay", as said in the beginning. So, when all is okay you can't do anything wrong, because it will be detected and nothing will be erased. This should not be the assumption though, you you must be careful yourself for sure. With what ?
Well, the field "Playback Drive/Folder" in Settings should refer to that empty medium. So, this medium should have a Drive Letter (referring to a Share Name is not possible) and the medium should have a Volume Name which is good recognizable for you. You shouldn't be working with a system which changes Drive Letters on the fly (this can happen with removable media like an USB stick, especially when stuffed into a different port opposed to a previous time), with the notice that in a system where almost all Drive Letters are in use, this can happen easily.
When there's also one folder (name) on the medium and that one is denoted as Playback Folder (but the whole will look like F:\XXPlayback\) that counts as another check. So, when the Drive Letter automatically changes by accident to e.g. G:, it is likely that on that now other medium (like a music discs) no G:\XXPlayback\ exists.
So, together with your attention and all the checks thinkable in the software, nothing should go wrong ever.
The Volume Name is not allowed to contain spaces.
It is theoretically possible that the medium you use is not suitable for this application (meant for Vista/W7/W8 anyway, so *not* XP or earlier). When this is so, an error message will tell you as soon as you attempt to use it. Notice that you will be using it as soon as
a. Anything is filled in the "Playback Drive/Folder" field in Settings;
b. You press Play.
As soon as the field mentioned is emptied a next Playback attempt will not use it anymore (so this is how you may compare SQ).
While writing about the various media which can be used, there is no real reason to not use a normal spinning disc for it. Or put differently : it was not tested by us whether, for example, a USB stick sounds better than anything else. This is up to you now (but chances are fair you will perceive differences between the various media).
The medium must be able to contain your Playlist Area contents in uncompressed form (like to WAV decoded FLAC).
Important :Since the music files to play will be copied to the Playback Drive, this means just another additional step for the system to perform. When Copy to XX Drive is set active, *that* step will be avoided (so, files will never explicitly be copied to the XX Drive first and next go to the Playback Drive), but otherwise all conversions needed do not go directly to the Playback Drive. Although not 100% true in all situations, it is to be considered that there's just another copy step. Now :
It is obvious that your Playback Drive medium should not be of the slowest kind for this reason. By itself it can be super slow (like an old type SD card) if only not Attended Playback is used then, because gapless won't be sustained or playback may stop all together. Not so with Unattended Playback, and what counts there is only that you have to wait for the music files to be prepared. If you can stand the wait for a very slow medium (with the pro of better SQ perhaps), all is okay. Otherwise use the fastest means available, especially at writing.
When setup in well fashion, this extra step may take 2 seconds or less only.
When you receive the message "Playback Drive improperly organized" ...Then most probably hidden system files prevent the "formatting" which is needed. See here to solve this :
How to let XXHighEnd format a Volume (more advanced).