I was looking online for an answer to this myself when I came across this discussion. I had already downloaded a couple of CD's in AIFF format and was very impressed, especially when remembering how they were in mp3 format. I've now directly ripped some CD's using XLD to both FLAC and DSD (Direct Stream Digital). The equipment used for listening was my macbook pro feeding to an external non oversampling single bit DAC, fed to a heavily modified Creek OBH 11 headphone amp feeding a pair of HD600's (also modified), I alternatively also listened to the mac directly using the HD600's and got the same listening results which were as follows.
If any of you have listened to a top end vinyl player, and a similar priced CD player, there is often a greater sense of air and openness about the vinyl player, that's how I would liken it between the FLAC and DSD files. The DSD being more airy and open, where as the FLAC sounds not closed in as such, but just not the same sense of spaciousness around either the vocals or the instruments.
I listened to both Eva Cassidy and Goldfrapp, so two totally different types of vocals and music. I did notice one thing though, and that was the recording on the DSD file was slightly lower in volume, but I'm sure this could be altered in my import settings on the 'gain' settings.
My personal preference is the DSD file type, but at the end of the day that's just what it is, personal preference and how you like the sound of your music, are you a CD fan or die hard vinyl or even tape like myself (I have tapes recordings I play on my CR7e that sound better than on the CD version), but as I say, it's all personal preference. I hope this clears the water rather than muddying it. For a slightly more open spacious sound around the music, go with DSD, for the more CD sound, go with FLAC.