I also think CDs ripped to lossless files on FLAC can sound better than the original CD, my theory being the error correction while ripping produces a more stable file (but don't have a shred of engineering background to prove this).
Austinbob, Most of CD players can read CD sector only once (since they work in real time). It can error correct for short scratches (up to about 4mm along the track) but for longer scratch (4-8mm) it interpolates. Computer rip reads CD like data and can go to the same sector multiple times (even thousands of times) until it gets proper checksum. Computer file can be better than original CD but I doubt that you can hear any difference unless original CD is badly scratched. On the other hand it can be very useful to create good CD-R copy of CDs that won't play or play with a lot of pops.