Carolpa, FLAC is fully compatible with BM5 but only to some extend in iTunes - as far as I'm aware it doesn't work on a connected iPod for example.
PhilLondon, interesting idea with the AIFF format. However, is doesn't appear on B&Os list of compatible formats for the BM5...?
I guess a reasonably practical solution to these issues could be to creaty (at least) two folders for the BM5 to scan; One containing iTunes(lossy) downloads and another containing lossless CD rips (necessitating other ripping software, e.g. Windows Media Player). Disadvantage would be that te iPod would not be able to read the lossless rips (unless there is some sort of conversion programme)......
And people say technology makes life easier - I miss the days of oldfashioned CDs... o)