Realy confusing overall

[raingod42]

ok, first thing, no you don't have to rip them at the same bitrate as your broudcasting.

if you want to link to files on another machine you have to specify the IP, the port and the song name - with the .pls at the end - and shoutcast is supposed to create a .pls automaticlly (never tried this - but this is what all the docs say), so your link should be something like this:
a href="123.123.123.123:800/song_name_here.pls". in fact, don't create the .pls file - let shoutcast do it for you. sounds weird but it should work. make sure you have no spaces in there - or put the spaces in the link (space = %20, so "music file name.mp3" would be "music%20file%20name.mp3")

not sure i understand your last problem - but hopefully what i stated on the top will solve that one too.
remember, linking to a file will only work if you have content on demand turned on, and will only play the file your linking to. also, NO subdirs are supported (nullsoft, when can you take of this bug?). they say it's becuase user security...

good luck!