Ive been aware of most of this ^ for some time now. Also with all the money apple is raking in from selling songs through iTunes for $0.99 they should of been using the .flac file format since day one, when they launched the iTunes store.
Heres a brief description of what .flac files are:
Free Lossless Audio Codec (FLAC) is a popular file format for audio data compression. Being a lossless compression format, FLAC does not remove information from the audio stream, as do lossy compression formats such as MP3 and AAC.
Like other methods of compression, FLAC's main advantage is the reduction of bandwidth and/or storage requirements, but without sacrificing the integrity of the audio source. For example, a digital recording (such as a CD) encoded to FLAC maintains the quality of the audio perfectly. Audio sources encoded to FLAC are typically reduced in size 40 to 50 percent. FLAC is suitable for everyday playback and audio archival, with support for tagging, cover art and fast seeking. FLAC's open source royalty-free nature makes it well-supported by many software applications. FLAC playback support in portable audio devices and dedicated audio systems is growing. Josh Coalson is the primary author of FLAC.