What format are most people using, and why?

I use WAV.

EAC gets the track names for me and thats all I need. I like to keep the file as close to the CD as possible too. Gives me peace of mind and I have plenty of space anyway.

I have been using Aiff files for all the music I've imported from my CDs, vinyl, and even cassttes. Compared to how much most of us spend on our rigs and even ICs, using up more HD space for higher resolution music seems relatively inexpensive. The CDs I made from my vinyl sound at least as good as the original and in some cases even better as when listening at louder levels with a subwoofer(turntables hate subwoofers if they are in the same room).. Also, I didn't want to re-import my music when I would surely get the upgrade itch. A year ago I was mainly listening to analog and have to say I've been seduced by the convenience using iTunes and quite satisfied with sound quality of my iMac to Airport Express to big rig. And I'm rediscovering so much of my previously neglected music now that it's a few clicks away.
I'll probably gain a few inches around my waistline as a result. Oh well.
Dare to be fat, fat is where's at-Rootboy Slim.

Use EAC to wav. Then use Itunes to convert the wav to apple lossless.

Instructions found here.
http://www.stevehoffman.tv/forums/archive/index.php/t-81756.html

Now I use EAC to rip directly to FLAC and J.River Media Center as my media player. Nothing else compares.

just a note... you should be seeing more than a 25% reduction in file size if you use FLAC at the highest compression ratio. It should be closer to 40-45% reduction.