M4A/AAC/MP4
can be lossless.
Where are you listening to your music from? Chances are that unless you are playing it through some super top of the line headphones or amp/speaker setup, you will notice little to no difference between lossless and M4A @ 256kbps or better. I prefer to keep most of my CDs and LPs archived in the lossless AAC format (a.k.a. ALAC, or Apple Lossless Audio Codec), but on my iPod I have it all in 256kbps AAC to use less HD space and not use as much battery life.
I can tell the difference between my 320s and my flac files easily, maybe I just have a good ear for that stuff. I do have about 4k into my speakers and receiver though(klipsch reference series and denon)
I imagine the only hold up making lossless codecs mainstream is hd storage. I think once we start seeing 1tb drives come standard on pcs then they will start to become more popular.
I am wondering though which one will come out on top, I was thinking how big. A following apple has, they could easily set the standard and get the word out about m4a
question though, If I have a library of m4a files, does iTunes automatically convert them to mp3 when you drag them to your iPod or iPhone?