For lossless I would prefer flac or wavpack. Flac is very well accepted and many things support it, it also is open source.
For lossy, I use good ole mp3s, 192kbps and up are good. VBR (Variable Bit Rate) is also nice. The LAME encoder is the only way to go. 320kbps MP3s, sound awesome. AAC is also good, just not as supported.
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