I may be wrong about this, but I'm going to try to explain the bit perfect thing for you since I don't find the other explanations here very clear.
As I understand it, it's possible to configure your computer to output a modified bitstream, i.e. not the original music data that your music files contain. At that point all bets about sound quality are off, since various software on your computer could potentially degrade the original signal.
The MDAC producers would like you to enjoy the MDAC by feeding it the exact original data in your music files, not a version modified by some software or hardware. To help you achieve that they have provided a standard file which the MDAC recognises because it has a version in its own firmware. The MDAC can therefore check that its own standard file matches exactly the file sent by your streamer/computer. If it matches perfectly then that's a good indication that your computer is configured to send exact original music files to the DAC. That then constitutes "passing the bitperfect test", and you can be fairly assured that your MDAC is not being let down by degradation further upstream.
Cunningly, rather than send around a music signal file which would use up bandwidth and disc space, the MDAC designers have made the standard file a data sequence which can be generated by a small programme in the Java language so that almost any computer can generate it locally rather than having to download a big file. Consequently you only run the Java programme once to generate the 'music' file, which you then send to the MDAC in order that the MDAC can verify that your computer/streamer is not degrading its output. You send the generated file by simply playing it through your normal computer/streamer audio player.
Please correct me if any of that is wrong, but I thought it needed clarifying for those who aren't too familiar with such things.