iTunes offers AAIF full feature codec and Apples own Lossless format.
Plus AAC and MP3 (both compressed) and WAV as well .
By the way the built in MP3 encoder isn't the best quality however.
I have used iTunes for just about ever (From OS9 days !), mainly because i can't be a***d to download .ogg or flac software.
However its for background listening and to fill iPhones
Still use traditional separates system for true listening (Arcam amp/cd player/Rega planar record player and Mission speakers.
If you want flac encoding try this link