I agree in every which way, that digital is not "perfect", and may never be, simply because timing is crucial in getting a good digital signal.
There is so much gibber about .wav vs. .flac, optical vs. electrical, player1 vs. player2... Honestly, it takes ears, not common sense (wow, thats a first) to figure out why something sounds better than something else.
Just choose what you want, and roll with it. I had .wav files before, but I couldn't hear the difference between one format or another. So I just went with .flac because I am a psycho about tagging things.
EDIT: Didn't mean to stir up trouble and high water.
Lossless should sound like lossless, that's that. Really, if something in the player makes .wavs sound better than another lossless file, then use .wavs.