As far as I know, WMP 11 doesn't support FLAC. So if you want to stay with WMP, go with WMA Lossless. If you want to change to a player that supports FLAC, go with Foobar2000, Mediamonkey, the Core Media Player, or DB Power Amp, I believe they all support FLAC after installing a .dll in the components folder (thats how foobar works at least). To encode to FLAC, you'll need either Exact Audio Copy or CDEX and the actual FLAC executable file. You can google where to get the executable. For the full steps to convert to FLAC, use the search feature on here, there are numerous threads pertaining to the process.
any questions, shoot me a PM, I'll try to get more in depth, but off to class now.