lossless audio... I've found that the quality of speakers has a much greater effect on audible sound quality than the actual encoding algorithm used, when adjusted to today's standards, at least. a 128k mp3 or m4a on some quality BOSE speakers sounds infinitely better than any lossless audio files can on my laptops speakers, or the speakers built into my TV, for that matter.
moreover... Apple's file formats = FAIL. I'm not too familiar with the security features, but I've had too many people complain to me about how their music libraries self-destruct when iTunes suspects that there's copyright infringement afoot.