FLAC - technical definition

(Free Lossless Audio Codec) An audio compression technology from the Xiph.Org Foundation (www.xiph.org). It is a royalty-free codec used to compress CD audio files to at least 50% of their original size (2:1 ratio). Unlike MP3, which provides much greater compression but eliminates content, FLAC restores the music to the original PCM 44kHz, 16-bit audio stream of CD audio.

A Solid Foundation
Although a 2:1 ratio is not extraordinary, the same disk holds twice as much music while maintaining the original quality. For example, if CDs are ripped to MP3s, the MP3s cannot be converted to take advantage of better quality using a different compression method, and if converted, they may very well lose some quality. However, FLAC files could be decompressed to the original format and compressed with the new method. See Ogg Vorbis and digital media server.