FLAC is a great open source tool for archiving audio. There is no loss in quality but it is smaller than WAV or AIFF files. See my blog entry about the various audio file formats.
While FLAC is very easy to create and use, there is some confusion about the best compression level to use. Unfortunately, a Google search does not clarify the issue.
For starters, it is important to understand that all FLAC files sound like the original. That’s why it is called “lossless.” The main difference in the compression levels is how much time it takes to “rip” the file and how small the resulting file will be.
Simply put – the higher compression level (6.7, 8): the smaller size of the file but the longer time it will take to rip.
As you can see from the graph, a compression level of 4 or 5 is the best choice. Higher takes longer but the file is minimally smaller.
Bottom line: use compression level 5
See the original study.