This isn’t actually that far fetched, seeing that WL has Sonnox Resore (LE) since WL7, and earlier WL versions had MP3pro by Fraunhofer bundled.
Of course, Steinberg won’t have the funds to include a run down version of Sonnox/Fraunhofer ProCodec. But fortunately, Sonnox/Fraunhofer thought of that and made a consumer version available recently. With two things that could be modified, should it be bundled with WL (see below).
Which brings me to the idea:
If MP3pro was part of WL once, why not reintegrate it again and also offer the HD AAC codec on top of it. And what could be simpler than asking Sonnox for a collaboration again and integrate Codec Toolbox?
This joint venture could have certain “modifications” like bitrates higher than 16bit (limitation of the consumer version) or SRC’s higher than 48kHz (also Consumer Version limitation) but not higher than 96khz (which would be more than enough IMO). You still have to go through the hassle to first check the audio stream with the Toolbox Plugin, and then encode later. But heck… it’d be a thing “in-between” Codec Toolbox and ProCodec. But exclusive to Steinberg.
The only issue I might see… Sonnox Plugins use iLok. Then again, the rundown versions of the Restore Suite run without one in WL. So… it might be possible.
What do you users think about it?
Personally I’d love to have such an encoder tool for all kinds of purposes, and I see HD AAC as the definite future of MPEG audio streams. Why not go for it?
This is something I brought up before some months ago, no serious reply i’m afraid. Look for the ‘‘mastered for iTunes’’ topic. Steinberg Forums
I ended up buying codec toolbox this week because there was no answer and I simply couldn’t wait longer for Steinberg to respond to this… 
IIRC, WL is still mainly coded by PG alone, and he can’t make decisions in terms of what is being bundled license wise. MP3 and AAC belongs to Fraunhofer, and Fraunhofer asks for a lot of fees.
Either way… I thought of implementing Codec Toolbox, since it’s fairly cheap to begin with (license wise), but I also thought of maybe “enhancing it” just for WL since the Toolbox (aka the “consumer version” of ProCodec) only has SRC up to 48kHz and a bitrate of 16bit max. If there could be a joint venture where Sonnox/Fraunhofer says “okay - let’s unlock both the bitrate and the SRC limits for WL only!”, this would be great.
Else I would have gotten Toolbox myself. Or ProCodec (which is a bit out of my pricerange currently).
I also see AAC as the definite future in terms of portable formats. And with HD AAC (lossless, backwards compatible), I think this will change the market in the near future as well.
Regarding mastering for iTunes…
IIRC, iTunes implemented certain loudness rules a couple of months ago. The “Music Loudness Alliance” hinted at that. And I think it’s based about/around -16LUFS, measured with an EBU R-128 meter.
So my recommendation I can give you, is maybe to dive into measuring with the EBU R-128 meter, or the ITU-R BS.1770 specs, and a reference level of -16LUFS, while having a TruePeak headroom of -1dB TP. You should be well within specs.
Or have it dead simple: take a look at ToneBoosters EBU Loudness - this tool uses (and supports) the so called “K-System v2” idea. Which is basically a combined idea the K-System’s loudness limits and color codes, but used with the EBU R-128 meter specs (in this case, the Short Term Loudness meter). It is aimed to be used by engineers that mostly handle music rather than broadcast streams.
Wavelab can be setup for that (reference level, color codes). But it’s a bit tricky.
Hmmm …
Off topic: I believe it is only iTunes Radio that these discussions centred on. Remember that there are already around 26 million tracks already uploaded to the iTunes store (source: iTunes - Apple (AU) ).
Some of these are pretty loud. The best information we have here is that Apple will simply ‘turn things down’ … as opposed to ‘processing’ anything … on broadcast. And that’s kind of why you’d expect when you have an existing catalogue of this size and diversity.
AFAIK, you are still sweet if your mastered for iTunes tracks do not clip the codec/droplet.
On topic: I have both the Pro Codec and the Toolbox. Great tools although I accept that the Pro Codec is expensive if you are not using it every day professionally. Love to see them incorporated in WL for other users’ benefit.