If any of you can vouch for the quality of other, truly lossless formats for use into a DAC, that would be great too.
I can certainly vouch for Apple Lossless - cannot tell the difference myself. You may want to just do an experiment to satisfy that question for your own ears. Just rip the same tune to several formats and have someone else play them back and take some notes on your repsonses.
No info on the ripping service, but it sounds like a good idea, and must be out there. A scratched CD would not necessarily be addressed by the error correction built into any given program....If the scratch obscures the information from the laser, or causes it to mistrack, I don't think there's any software that will correct for the mechanical error. As far as the service charging, my guess would be that they would as it would still take some time to figure that out, and you may still be able to rip the unaffected tracks anyway.