Unless you use lossless compression! I encode everything to FLAC when I rip CDs because it takes less space than WAV or BIN/CUE and it's easy to transcode to any other format without an additional stage of loss that you'd get if you ripped to OGG/MP3/MPC/AAC/WMA (because it seems like every damn player has a different native format ).
That said, Level 10 OGG or a high bitrate AAC is more than adequate for 99.99999% of the people out there (hell, on pretty much anything under a grand or so, you can get away with Level 6 or 7 OGG and never know the difference unless someone tells you) and that extremely rare person that really can tell the difference between between an extremely high bitrate (and properly encoded!) OGG/MP3/MPC/AAC most likely wouldn't be caught dead owning a low end, common man's platform like the Xbox360. Maybe a classic PS1 for audio CDs, but it could only be the most pristine PS1 that's resting on vibration dampeners and modified to support their modular home theater controller. Audiophiles are funny like that.
People that argue about how much lossy compression sucks are typically the people that have negative memories of 96kbps BladeMP3-encoded tracks that they snagged off of Napster back in the 90s. AAC is an amazing compression scheme (as are the other modern lossy compression schemes, for that matter). Mourning the lack of lossless in the Xbox360 is like mourning the lack of hardcore, overly detailed Derek Smart-style space sims on the PS2: Wrong audience, man.