Any lossless format - typically Apple Lossless and EAC - and any uncompressed format - ie .wav and .aiff will out perform anything but the best CD player. Two parts to the magic - first as you already surmised is the way the rip is done. But of equal importance is the decrease in jitter and other artifacts that comes when you use a hard drive as a transport instead of a CD player. Third piece of the mystery is to get the data off the hard drive using USB, Firewire, Ethernet or Toslink on certain Macs as opposed to using a soundcard and SPDIF
AAC and MP3 can be very good depending on the compression selected but are mostly used in portable devices where file size is an issue.
AAC and MP3 can be very good depending on the compression selected but are mostly used in portable devices where file size is an issue.