I think there was a mix up of Lossless here.
Lossless is for formats like Flac, SHN, Ape audio, and certain versions of WMA among others. These compress digital audio down to smaller file sizes but do it in a way that is reversable. They retain 100% audio quality. It would be the same as using .wav files. I think Flac is the most common version used nowadays.. Some online music publishers will actually sell flac files for discriminating customers.
Lossy formats are those that acheive very high compression by removing or modifying carefully selected audio data and compressing the rest. Stuff like MP3, Ogg Vorbis, or certain versions of AAC or WMA (they are more commonly used versions). They try to do it scientificly.. like a loud high pitched sound will mask a slightly lower pitched quieter sound in human hearing.. so you can get away with removing the lower/quieter sound without noticable impact.
For instance I have a 2:30 song.. In wav format it's 26MB. In the highest compression setting the flac version is 11MB. There should be no discernable difference between these two. If you compress it into a flac file and uncompress it back to wav the checksums match up, which wouldn't be possible if it wasn't a bit for bit exactly the same.
Now for a lossy format encoded at the quality of '8' for Ogg Vorbis yeilds a variable bitrate of around 212Kb/s (compared to 700-800 for the flac) and a file size of 3.8MB. When decompressed back to wav the best it could possibly sound would be the same as the Ogg Vorbis version, the sound is lost forever. The default quality setting yeilds a 100-128Kb/s and file size of 1.9MB. The lowest quality setting yeilds a file size of just 716KB and a bitrate of 30-34Kb/s.
So you see even for a audiophile the lossless format is great. More music on the same storage with the same quality. Lossy formats should be avoided for highest quality.