FLAC is hands down the winner if you are using a windows PC. Everyone that makes a UPNP player supports it so you will have more options down the road if you decide to change your system. You won't have to re rip everything if you change your system in a couple years.
I use a Mac and I use itunes rip to either Apple Lossless or AIFF . I haven't settled on either one of these two formats yet.They both play the same.
Reese, If you are setting up a new Mac Mini based system Apple has a new Apple TV which only costs $99 bucks. That makes it easy to move away from the Airport Express.I had a lot of troubles keeping the Airport on the network.
I just added my 5th Apple TV to my network .
If you are having trouble with covering your whole house I would think you could add an Airport Extreme which would extend your signal. Not sure but I think so, wireless networking is not my strong point.
Bill, I've been meaning to ask you this, have you found anything that will let you share rip and share SACD or DVDA 5.1 music files over the network?