I can't hear the difference between Flac and 320kbps Mp3s. I have kick ass computer speakers though. If you get low bit rate mp3s of course you will find that flac is so loud and sounds much better.
That is part of the 'clue' as to what (generally) people are trying to a/b sound (or video or whatever) all the time. 'kick ass computer speakers' would be VERY low-end audio speakers in any decent audio system.
There's simply too many variables in the mix. There are other lossless encoders other than flac out there, all of them are the audio equivalent of zip or rar, in that the bitstream in is identical to the bitstream out, it simply uses the power of the computer to squeeze the redundancy a bit, in (near) real-time.
As far as compressed (lossy) formats like mp3 or acc, tons of real-world testing has been done over the years, with double-blind methodology, utilizing high-quality reproduction equipment. The same, interestingly, was done at the dawn of digital music with the CD standard (44.1khz sampling, 16 bit resolution), in the early 80's, when lots of folks found the 'supposedly' pristine CD wave format sonically sub-par next to their analog (either disc or wideband tape).
A lot of the early encoders in use by even the top studios were found to be at fault, and over the years both that equipment (analog to digital or a/d) has improved, and even more important, direct to digital studio have proliferated.
Back on the home front, newer encoders (for older formats such as mp3) as well as new (although now approaching 20 years in use!) acc, have made strides.
But don't think for a minute that, again, the quality will be 'indistinguishable' from the original CD (if, of course, that CD is engineered well). How MUCH of a difference is up to you.
What's nice about the lossless formats such as FLAC is that you know from the start that you have the exact original CD bitstream to work with, and how you may want to manipulate that is up to you. You can keep it in FLAC (to save on disc space, say), or transcode it to the lossy format of your choosing.
Several years ago, when HD prices were first getting 'good to go', I took the time and effort to do some testing with my own ears and with available equipment, to see where, at what point, audio quality was good for a portable environment (my car), which had a fairly decent system, and a new head unit able to play mp3 cd's (one of the first available at the time).
I found that 192kb/s CBR (constant bit rate) was the minimum I was able to not hear really objectionable audio artifacts. Not that I would ever use that in my home system, but given the limitations of the auto system, plus road noise and such adding into the mix, and it has served me well. So I encoded my CD collection, and went from there.
Now, I'm about to install a new head unit that not only does mp3, but acc and wma as well, and I'm thinking that redoing things to high bitrate acc (say, 320kb/s or higher) will result in a noticeable upgrade. I'll see.
But meanwhile, if you have a home system where you can easily (with today's super-capacity HD's), simply store either the WAV files or a lossless equivilent like FLAC, and especially if your pc has an optical output so you can route the bits to a decent d/a (digital to analog) converter, then that's really the way to go. Having either the original WAV or lossless FLAC (or other lossless format) means that as you upgrade other components in the chain (like I am with my car head unit), you can 'go back' to the 'pure' original and go from there.
BTW, my mp3 project years ago took a bit less than the capacity of a 160GB HD to put all my CD's (at, as I said, 192kb/s CBR mp3 encoding), with a bit of room to spare. I could easily do the same today with a lossless format (even the original WAV files) on a terabyte drive.
What's kinda unfortunate, is that I've yet to find a car unit that will do any lossless formats other than the original CD WAV files (from optical discs). Many now have USB inputs, but again, not the internal decoding chips to do anything above mp3/acc/wma, although there are some folks 'kit-bashing' together hard-drive systems that do all the decoding internally within a box, then output analog audio to the head units.
Sounds interesting, but I'm used to carrying some 500+ cd's with me (in case logic folders) as it is, so...
Again, it's what you can tolerate, either mechanically, or sonically.
I might add that, although I usually don't 'scan' the lossless (FLAC or otherwise) newsgroups that much, having spent many years collecting and adding to my collection (even back into analog/56k and lower days), the wealth of lossless audio on the newsgroups is huge. I'd say if you spent the next 6 months keeping an eye on them, that you'd probably get everything you ever wanted and more, using either manually scanning headers or one (or more) of the indexing sites.
