The advantage of lossless to me is more for archival purposes. i know that i won't lose any quality if a better format comes along later on, or if i want to make perfect copies of songs for a CD. i'm anal about that. It's not so much the sound quality because i don't have equipment that i could discern anything at or above 256kbps CBR from lossless anyways, and that's probably being a little generous.
The major downside to FLAC is that there is such poor mainstream support. iTunes is the only mainstream player that won't play them, but MP3 player support for FLACs is simply non-existant unless you get some brand you only see online. It really doesn't make much sense to play lossless music on a portable anyways, but i'm sure some would disagree.
i don't bother to download FLACs outside of live performances simply because the selection isn't there, they're large files, and having a less-than-CD quality version gives me some motivation to actually buy the CDs. i've got a hundred or so FLAC albums, and only a half dozen are actually downloaded. The rest is stuff i rip. 192kbps (CBR, VBR, -r3mix, etc.) is fine for causal listening, which is all i do these days.
