I want to talk MP3s/AAC/FLAC for high-fidelity i.e. sitting on your sofa and listening through two nice speakers, not interested in portables - we all agree they sound great.
Now for hi-fi, I have several issues here:
1. Consistency, yes one would think ripping an MP3, using the same software at the same bit rate would achieve the same results from PC to PC. Not to my ears! I cannot get consistent MP3 ripping results. So this is the first hurdle to digital nirvana. And whichever software I use, on the same PC, I cannot find an ideal balance between dishwater-dull sound and ear-splitting sibilance. The latter does not seem to be an issue with WMA or AAC, at any bitrate.
2. Yes, Linn are offering digital products now, but they're not as straightforward as one might think: even their entry-level Sneaky Music DS Player requires, like other similar devices:
a) An additional device, like a Nokia N800, to act as a glorified remote control. Great, yet another device to chew up power and/or batteries, and to switch on/off. Just what we need in this day and age.
b) At least an intermediate knowledge of home networking - although Linn recommends professional installation for even their cheapest products.
c) Coming back to ripping software - they do recommend a certain package, and I can only trust them.
3. Major record labels are not going to offer their music in CD-or-higher quality digital formats anytime soon. So forget about purchasing Madonna in FLAC. It's not in their interests to do so. Smaller labels will, B&W (yes the speaker company) in collaboration with Realworld (Peter Gabriel's label) are offering new music in Apple Lossless - if only others could follow. And of-course Linn themselves offer music in breathtaking sound quality. But that's the difference, companies like Linn love music and music lovers, Sony et al do not, so keep dreaming folks.
4. There is a real effort to get the most out of digital music, albeit expensively for iPods:
a) Arcam have the rDock
b) Wadia have released the 170i Transport, but the first reviewer told me via email it was designed to be used through its native digital output connected to a DAC (which does not come cheap), and not to expect much beyond Apple's own dock through the analogue outputs (don't know how true this is - have emailed Wadia for a response and waiting for other reviews - WhatHifi get on it!!!) So it's a relatively inexpensive device meant to be used through a high-end system.
5. In general I find MP3s a bit too harsh, AACs and WMAs a bit lacking in dynamics, so to conclude, the digital music medium is by and large immature - both technically and commercially. And it will succeed or fail by the sword of corporate greed.
6. I would like to see a standard(formal or otherwise) for compressed music e.g. MP3 at 320kbps using a widely-accepted ripper, and also one for lossless rips - perhaps FLAC also using a widely used ripper. But of-course open-source zealots will be up in arms about this. Choice is absolutely necessary but not always a good thing.