(Free Lossless Audio Codec) is a compressed digital audio format so has smaller file size than uncompressed formats.
To convert the audio samples FLAC uses a combination of linear prediction, Golomb-Rice coding, and lastly, run-length encoding for blocks of identical samples, such as silent passages.
FLAC format is currently well-supported by many software projects and hardware support is growing. Josh Coalson is the primary author of FLAC.
Comparisons to Other Formats
While several other compressed formats like MP3 and OGG are "lossy" (meaning they discard audio information to achieve compression), FLAC is lossless. It has the same quality as the lossless uncompressed WAV and AIFF formats, but with smaller file size. Audio encoded to FLAC is typically reduced to a little less than half of the original file size. An MP3, by comparison, is typically one tenth or so of the original file size, but with lost audio information and lower quality.
FLAC supports metadata tags containing information such as title and artist (similar to the ID3 tags in MP3 files), and supports cover art. Unlike MP3, FLAC is a free, open source codec.
Other similar lossless compressed formats include OptimFROG (.ofr), Wavpack (.wv), Shorten (.shn) and Monkeys Audio (.ape). There are also lossless compressed versions of the proprietary Apple, Windows Media and Real Audio lossy compressed codecs. Audacity cannot currently import any of these alternative formats, with the exception of Apple Lossless, which can be imported into Audacity 1.3.3 Beta when run on Mac computers on the OS X operating system.
Selecting FLAC Export
The current stable Audacity 1.2.6 can import 16 bit FLAC files. Export of FLAC does not work in the distributed Windows and OS X builds. If you compile Audacity from the stable source code with suitable libraries, 16 bit FLAC export should work and can be enabled on the in the "Uncompressed Export Format" dropdown.
The Beta 1.3.3 version of Audacity has full support for export and import of 16 and 24 bit FLAC. New to 1.3.3, the export format is now chosen in the "Save as type" box in the "Export File" dialogue when you click. New options for both FLAC and MP3 export have been added and are available by clicking the "Options" button in the dialogue.