If you really need lossless, flac-in-mkv, mpeg-4 lossless, or Apple lossless in mpg/mp4 via dbpoweramp is the way to go. (Apple lossless is around the same size as FLAC but more compatible with mp4.) A high enough bitrate aac or mp3 could be perceptually lossless while saving even more space, but that's entirely up to you. [Shoot, I guess only itunes encodes Apple Lossless.] Here's a link to , btw, though I don't know of any dshow decoders yet. It's rather fast (around half the speed of flac) and somewhat smaller than flac most of the time. I'd wager it could use some optimization.