FLAC

FLAC stands for Free Lossless Audio Codec.

Lossless means that the audio is compressed, but the quality of the input audio wont suffer from the compression, but remains identical. This is exactly unlike the audio formats such as MP3 and WMA work -- these audio formats are called "lossy" and that means that when the original audio is encoded into the lossy audio format, some of the audio data is lost forever and can't be brought back by any means.

So, to summarize, by encoding audio files with FLAC, the quality is exactly the same as the original audio file's quality is.

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