I have to agree with everyone saying that it's far more functional, provided you have the HDD space, to use FLAC or other lossless encoding method.
1) No quality loss.
Yes, lossy can be transparant, and usually is for most people, on most people's gear. But with a higher end system, or better trained ears, even high bitrate lossy files can often be told apart pretty easily (depends on music). My friend, who is very un-into audio as far as seeking high quality goes, was able to tell the difference between some CBR 256kbps mp3s i had lying around (not ideal, i know--lame encoded at least) when using a pair of lowish end electrostatic headphones, and blindly at that.
2) Convenience.
I can encode them into whatever lossy form I want, at any time. Transcode lossy files a couple times, and it really begins to show, there's no denying it. Or, I can burn them onto a CD identical to the original (other than not being pressed).
3) Bragging Rights.
Seriously, who wouldn't think you're awesome when they hear you say "Yah, I have a ton of FLAC on my computer, it's really nice." Ok, just kidding.

Oh, also, there were some comments earlier about video. Yes, I buy DVDs, which are lossy. That's not to say that I don't notice. Most DVDs aren't all that well encoded, and there are a ton of artifacts. Even well encoded ones have their limitations, and you can tell. However, the difference is that there is no other alternative that is better. You can't buy the raw film (the equivalent of buying the CDs for music). Of course, even if you could, those mediums also have their limitations. If they didn't, and no one could tell the difference, why would SACD and DVD-A exist? Or higher quality films?
Obviously, once again, DVDs are in general perfectly good enough for the general populace. I know people who don't notice any difference between DVDs and VHS, even. That doesn't mean that, just becuase it's usually transparant for most, that it is for all. Nor does it make people crazy for wanting better, even if they can only marginally tell the difference.
Also note, that when working with video, you always want to use lossless compression, like HuffYUV. No matter your source. Otherwise, you basically wind up encoding it at least twice (source->finished edit->good encoder), and that can really hurt the quality. Even at high lossy rates. This is just a corollary to the whole "but you can transcode lossy!" argument.
Anyways, that's it. Just thought I'd chime in. I'm new here, first post, came from head-fi actually. Yeah, start pointing and laughing now. I just got into this whole "audiophile" thing, and I'm definately not hardcore. I use lossy, don't get me wrong. But, I also recognize that it's often not up to snuff. Maybe I'm in the minority, but I decided that by myself, not just because it's "cool" or because I thought lossy audio, inferior equipment, and such were inherently terrible. I used to think that my dad and his friends were all completely insane. Then I decided that, hey, these headphones really sound bad compared to X other things I've heard places. So I bought some midish-level cans (HD495s). Had them for 2 years. Started to use them a lot a couple months ago, and realized that I wanted better. The sound was just too muddied, instruments non delineated from each other as well as I wanted (even though they were already LIGHT YEARS ahead of normal headphones). Now I've got some HD650s, am workin on an amp for them, upgraded my sound card (E-Mu 1212m), will mod it hopefully as well pretty soon, and am fearing that there's no end in sight (except lack of money!)
I find this forum very interesting, lots of good topics. Sorry for the long, boring post.