Got the 598 yesterday, finally! I seriously have yet to see more beautiful headphones. Sound is OK, can't really compare it to anything else but some Nokia headphones. But I couldn't hear a difference between FLAC and mp3... probably my ears, right guys?
edit: Tried youtube vs flac - there IS a difference, but can't say better or worse, just different.
edit2: Move along, there is some controversy about this.
Give it a couple of weeks... trust me on this one, you will seriously love the sound as you acclimate to your new phones. I had the same initial reaction, after a year of listening to my Grado RS2i. Now, I am using my 598s more than my Grados, which were more than double the price of the HD-598. I'm still a Grado fanboy, but I am starting to understand why so many people love Sennheiser.