Whoa, my ass just got jumped lol. Well you're right about a few things, first of them being that there's no difference between FLAC and wav as far as PCM signal goes. I have friends who tell me you can hear the compression with a pair of T1s, but I don't know myself. Regardless, my point stays the same: .wav is pointless for listening.
As for iTunes, last time i bought a song off iTunes (which granted was a while ago) it downloaded an MP3 256kbps, not aac and MP3 320 is objectively better than MP3 256, so... yeah, I think that speaks for itself.
I'm trying to avoid the issue of torrenting, but if you're any good at it you can find high quality stuff. Again, I don't condone it or recommend it, but it IS possible to get really good quality stuff through that method if you want to take that route.
Hope that clarifies things. Certainly not trying to spread misinformation.