If I follow this EAC + FLAC Image do I end up with seperate FLAC files, one LOG file and one CUE file?
say I then wanted to use these flacs to create MP3's which will play back gaplessley without a CUE sheet
would I be able to transocode the FLAC files in such a way that the MP3's I will have would be EXACTLY the same as just using EAC to produce those MP3's (assuming both extractions of the wavefiles were identical of course, ie no errors and same settings)
*NOTE is the same for nero AAC as well?

IF you must know why I want to do this is AT the current moment it is easiest to have a SOFT rip of all my cd's which I can play normally in foobar (with some plugin to emulate iTunes .xml and 5* rating system) I would then choose my 4&5 star songs and encode to a lossy fomat for my portable player

Your questions are not completely clear to me, but I'll try to help.

no, Image = single file. Though foobar2000 can treat an image + cue as separate tracks and allow you to convert any tracks separately. But if you truly want your FLAC files stored as separate tracks, follow a guide like this one - http://wiki.hydrogenaudio.org/index.php?title=EAC_and_Flac

The key to gapless playback of MP3s is using the LAME encoder, which uses a special tag/header to store information which a compatible player* must use in order to avoid gaps between tracks which are meant to play back seamlessly.

CUE sheets have not much to do with gapless playback, except that playing an image+cue file is one way to avoid non-seamless track transitions on players that don't really support gapless playback.

using foobar2000 + LAME will be the exactly the same as EAC + LAME

Sure, as long as you're using the same external encoder, it doesn't matter if the tracks are processed by EAC or foobar2000.

[*]
If you're concerned about gapless playback on your portable, just know that there aren't many portables that support gapless playback, besides certain iPods, or players which can use 3rd party Rockbox firmware.

Okay, take Linkin Park Hybrid theory for example which is if you didnt know an accurate rip key disc, I configure my drive to make wavs that say they are accurately ripped with an average confidence of about 8 or something, so then I make an image plus CUE and eveything goes well, then using DAEMON I load up the cue sheet and then the accurate rip thing comes up saying that I have a key disc, then I click of allowing it to calulate the offset of the mounted image which should theoretically be zero, but instead I get an error telling me that the image does not match the one which is in the database.
If anybody can tell me how to fix this all my above quesitons will in effect have been answered

Check CRC values for tracks ripped from the CD vs. tracks ripped from the image.
If CRCs don't match, use EAC's "Compare WAVs" tool for clues.