At 128kbps and higher Musepack (mpc) is the best lossy encoder quality-wise. Ogg Vorbis and AAC have the potential to become as good (maybe better) but for both formats there aren't any encoders tuned as well as Musepack encoder.
Additional advantages: No change in file length (= gapless), fast encoding + decoding, good taging format (APE2).
Obviously, the BEST audio compression is lossless compression, where the compressed file can be decompressed to a perfect bit-for-bit copy of the original. The 2 most popular programs that can do this are:
What are you looking for? Best compression, without loosing any quality at all (lossless), or compression that gets rid of "unimportant" audio data, yet still keeps good quality?
MP3 or OGG for compression, while cutting out unnecesary info.
