^ FLAC is an overkill for most hardware. Waste of space mostly, with no tangilble results. The difference is notable only on super high end hardware. Musepack on very high quality encoding is not differentiable from FLAC / WAV even on hardware like Sennheiser 580 and M audio delta, not saying that it's the best of the hardware, but respectable enough.
Mp3s are useful when you want instant compatibility with portable mp3 players.