Maybe I am asking myself too many questions ??
Yeah, I think that you are...
Forgive me, but MM makes life pretty easy - no need for multiple libraries at all, here's what I'm doing:
1.) I rip everything FLAC with DBPowerAmp from Illustrate and,
2.) Store on my local HDD. I have a mix of over a thousand albums ripped as FLAC files, a couple of dozen albums ripped at 320k, and a handful of 192k MP3 rips from a long time ago. I keep all of them in one library - with MM, there's no need to separate them!
3.) I do a timed backup to a mirrored volume on my SAN to ensure that I won't have to re-rip 1,000+ CDs if a drive craps out.
That's it, man. It's easy... I can down-rez to any format for an iPod, by simply selecting a rule in MM... or any other bit-rate, or any other format that I need / want / like. Or, I can "rebuild" bitperfect WAV files from the FLAC compressed rips, and listen to real CD-quality audio on my iPod... and you don't want to get me started on the limitations of the red-book CD format bc I'd probably bore you to death.
95% of my music is ripped to FLAC, and the majority of that with DBPowerAmp... simply because of AccurateRip. I want to be sure that I have a bit-accurate copy of the CD. Your comment about lossless formats "getting better" is kinda true, but you have to remember that lossy formats are just that - they throw away certain information to save on disc space. I bought a 1.5Tb WD Caviar Black last week, from Amazon, for 77.00 USD. Why would you compromise your music quality when storage is so damned cheap?
OK, I'm off my soapbox. Just so that you know that I'm not totally full of schytt, my portable system == IPod Classic 160Gb, ALO Audio line-out cable to a Ray Samuels Audio Predator headphone amp (using analog, even though the Predator has a USB DAC). My IEMs are UE Triple.fi 10 Pros. I'm 53 years old, and I'll challenge you to a blind run-off between accurately ripped FLAC files, re-converted to WAV, and any lossy format on my rig... I'm that sure about the quality, and my ears are toast. <g>
If you love music, you owe it to yourself to a.) get some decent IEMs, b.) consider an external headphone amp and c.) listen to CD-quality digital audio. Life is too short to listen to MP3s!
Yeah, I'm a bit goofy... but music is really important to me, and the capability to do lossless is virtually free today.