It doesn't stop playing when emplode is running, although it will briefly stop at one point during the synchronization process if you do that (it has to reboot as part of the synch). I seem to recall that it refuses to connect to emplode while it's in the middle of compressing (and emplode tells you so if you try it) so you can only use Emplode when compression is finished. I think the thread priority of playback/serving is higher than compression, but I don't think it completely stops compressing during playback.