Lossless is the way to go. However, MP3 is also required.
Lossless is required because it preserves your music in full quality. MP3 is a LOSSY format, even using LAME VBR. This is because MP3 encoders will ALWAYS selectively remove information. If you have good speakers or headphones, you can tell the difference.
For this reason, you should have your discs backed up into lossless in one place and your mp3s in another. MP3s are needed so you can have your music portable - otherwise, portable storage of FLAC is simply unfeasible at the moment. However, storage is VERY cheap these days: DVDs cost 20c or less and you can get a 1TB hard drive for $100. When you can get a gigabyte for 10c or less, the size difference between say FLAC and APE is nonexistant.
There are many different lossless formats, but FLAC, Apple Lossless, and WMA Lossless are the main ones. Apple and WMA are proprietary, but will be around for a LONG time because they are owned by Apple and Micro$oft. FLAC is open-source and has a strong following, so I believe this makes it the proper choice. But all formats are interchangeable, being lossless.
I've also seen people use OGGs. I stay away from those as they are less compatible with Apple products. They take up less space, but again, the storage size is negligible, even for a 4GB iPod.
However, I'm not sure about uncompressed WAV. I posted a thread about this awhile back on what kind of 'standard' we might want for VGM archival (and more importantly, the inclusion of .cue sheets on the VGMdb):
http://vgmdb.net/forums/showthread.php?t=1397
Hydrogen Audio discusses the different types of cue sheets and ways of ripping the albums:
http://wiki.hydrogenaudio.org/index.php?title=Cuesheet
I haven't begun my lossless ripping process yet as I'm still trying to figure out the best format for archival. I thought FLAC+Cue was the best, but WAV would make it simpler to reconstruct the original disc (which is the whole point of archival). However, WAV would probably take up about 20% more space on average, which IS something to note... But even then, you probably won't notice it anyway unless you've got hundreds of albums. And then you'd be trading off space for time, and I think time is more valuable to us. I shy away from single-track rips only because it's impossible to view the tracks individually without loading the entire file. Thankfully, I don't have 300 albums (I'm closer to 30 :P) but that's still a LOT of work (especially when you include games with CD audio).
EDIT: On second thought, I'm thinking WAV might be the way to go for archival backups. For one thing, every WAV file will be the same size, while FLAC will have varying file sizes depending on the compression.
WAV > FLAC/Lossless > MP3/OGG/Lossy
Your lossy format would be required for portability. However, WAV or Lossless would be required for archival, and if WAV is better due to speed, closeness to original format, and stable file sizes (even though lacking in size), then that would be the format to use. Thankfully, you could restore the original album with lossless if you had the cue sheet (and ideally sfv) to verify the WAV after conversion. As you can see though, the 'conversion' part takes more time.