And on a slightly more serious note, this FAQ
from Apple indicates that music downloaded from the iTunes store is supplied as DRM-free (no copy protection) 256 bps AAC files. To my knowledge, Apple has never offered ALAC (lossless) files in the iTunes store, and if they have any plans to do so in the future, Steve must have somehow forgotten to let me know.
Those looking for the Beatles catalog in the highest possible resolution should consider buying the version on flash drive. It may come as quite a shock to the average effete audiophile, but 99.9% of iTunes store customers don't give a rip about lossless encoding.
And at the risk of obliterating any audiophile cred I might have, before you completely dismiss this format, how about blowing a buck-twenty-nine on one of your favorite tracks to hear what it actually sounds like? While definitely not the last word in quality, you might find they actually sound pretty darn good for all but the most critical listening.
By the way, it seems part of the format confusion has to do with all these abbreviations people fling around: AAC, ALAC, and now Rwwear has raised the ante with Aflac, which sounds like some kind of insurance industry codec where they replace your files if your hard drive crashes.