There is FLAC decoder code in LÖVE, but it was disabled at some point. Like slime said, it's probably better if people pack their audio with a lossy format. The lossless one can always be distributed separately.
There would be the advantage of having a proper lossless decoder in LÖVE if it would be re-enabled. *gives libmodplug an angry look*
No kbps, 24-bit depth, high quality audio.
FLAC usually has a bitrate of 500 to 1100 kbps for me, depending on the audio. OpenAL could only handle 16 bit anway. But yes, it is lossless.
