Following some further fine-tuning of the method it's time to issue the next Release Candidate for lossyWAV:

CODE
lossyWAV v0.9.2 RC3, Copyright (C) 2007,2008 Nick Currie.
lossyWAV is issued with NO WARRANTY WHATSOEVER and is free software.

Usage   : lossyWAV <input wav file> <options>

Example : lossyWAV musicfile.wav

Quality Options:

-1/1a/1b       quality preset 1, circa 480kbps for 44.1khz, 2ch;
-2/2a/2b/2c    quality preset 2, circa 425kbps for 44.1khz, 2ch [default];
-3/3a/3b/3c    quality preset 3, circa 375kbps for 44.1khz, 2ch;
-4/4a/4b/4c    quality preset 4, circa 350kbps for 44.1khz, 2ch;
-5/5a/5b/5c    quality preset 5, circa 335kbps for 44.1khz, 2ch;
-6/6a/6b/6c    quality preset 6, circa 320kbps for 44.1khz, 2ch;
-7/7a/7b/7c    quality preset 7, circa 305kbps for 44.1khz, 2ch;
               [a/b/c = 1/2/3 extra FFT analyses; default=3,2,2,2,2,2,2(max=5)]

Standard Options:

-o <folder>   destination folder for the output file(s).
-nts <n>      set noise_threshold_shift to n dB (-48.0dB<=n<=+36.0dB);
              (-ve values reduce bits to remove, +ve values increase).
-snr <n>      set minimum average signal to added noise ratio to n dB;
              (0.0dB<=n<=48.0dB) Increasing value reduces bits to remove.
-force        forcibly over-write output file if it exists; default=off.
-check        check if WAV file has already been processed; default=off.
              errorlevel=16 if already processed, 0 if not.
-noclips      set allowable number of clips per channel per codec block to 0;
              default= -1=0,-2=1,-3=2,-4=3,-5=4,-6=5,-7=6.
-correction   write correction file while processing WAV file; default=off.
-merge        merge existing lossy.wav and lwcdf.wav files.
-scale <n>    scaling factor from WaveGain / etc; default = 1.000000.

System Options:

-quiet        significantly reduce screen output.
-nowarn       suppress lossyWAV warnings.
-detail       enable detailed output mode

-below        set process priority to below normal.
-low          set process priority to low.

Special thanks:

David Robinson for the method itself and motivation to implement it.
Don Cross for the original Pascal source for the FFT algorithm used.
Horst Albrecht for valuable tuning input and feedback.


Explanation, history and lossless codec settings in the wiki article