Like just about everyone else, I'd recommend Monkey's Audio, particularly if you are going to use Media Jukebox or Media Center. You don't need any additional plugins to encode to Monkey's Audio using Media Center--it's included by default.
I personally use "High" compression mode for Monkey's Audio, and I would generally recommend either that or "Normal" (you can always change compression modes after the fact).
I strongly prefer to rip using either Exact Audio Copy (
http://www.exactaudiocopy.de/) or Media Center's "Digital Secure" setting. When I ripped my 200-CD collection, I was interested to see many read errors occur, despite the fact that I have top-quality drives, with top-rated DAE, and all of my CDs were in clean, pristine condition. Those read errors would probably have been undetectable for the most part, but ripping is such a hassle I'd rather not gamble.
Here are a couple web pages with comparisons of various lossless formats. I can't vouch for their accuracy or content. My own inclination is very strongly
against the use of Windows Media, for various obvious and not-so-obvious reasons.
One grudging vote in favor of Windows Media is that it is much more likely to win hardware support. However, this makes no difference to me. I'd rather use Monkey's Audio and convert files as needed, than use Windows Media exclusively (This is what I do now with Monkey's Audio and my MP3 player). But that's me.
http://www.lossless-audio.com/comparison/http://home.wanadoo.nl/~w.speek/comparison.htm