FLAC stands for Free Lossless Audio Codec, an audio format similar to MP3, but lossless, meaning that audio is compressed in FLAC without any loss in quality. This is similar to how Zip works, except with FLAC you will get much better compression because

We invite people to bootleg our shows. We invite people to…make CD copies…. we've no problems with that, but if some guy is gonna make money off the back of this, we're gonna find out where he parks his car… -- Bono on KROQ Radio USA (10-2000)