When a media player plays the audio in your flac file, it is essentially decoding the flac data to a PCM format prior to sending that PCM data to the sound card. It will decompress it to the exact same data that went in; so if 16-bit 44.1 KHz PCM data went in, that's what'll come out, and go to your speakers.
Converting MP3 to WAV is usually done for compatibility, not for better sound quality. MP3 is a lossy compressed audio format. Part of the data has been compressed and removed. Even changing it to WAV format will not restore data automatically. Neither QuickTime nor Windows Media Player can convert MP3 files to WAV.
The happy medium between small file sizes and true CD quality audio is a 256kbps bit rate. This offers vastly superior sound quality over 128kbps, without eating up too much disk space.
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