If I download music from amazon.com at 320kbps, and decompress/conver the files to flac or wav using MC18, does the resulting file have the same bit for bit data as the original CD. File size and bitrate indicates such, but what is really happening?
No.
MP3 (and AAC and most other "distribution" compression systems) are
lossy. Once those bits are thrown out, they
cannot be reconstructed (okay, it is technically possible, but very, very, very unlikely on the order of a million monkeys on typewriters eventually typing out Macbeth).
Flac (and APE and ALAC) are Lossless, much like a zip file. They reduce size by eliminating redundant data that CAN be completely accurately reconstructed (and is, every time you play the file). But the source for the compression must be the original, or else you're simply bit-perfectly reconstructing the "already degraded" data of the original MP3 source.
Now... That said, is there a difference?
No. LAME v2 (and v1 and v0, which are even more "lightly compressed) MP3s, which is what Amazon sells, are transparent to the original audio (except with extremely contrived examples designed intentionally to trip up the compressors). There have been a TON of real, double-blind ABX tests done with high-end systems (and high-end ears) that show this to be the case. Check out HydrogenAudio if you want the data.
In any case, converting them from nice quality MP3s into FLAC files (or whatever) is a waste of time.