my personal view on the matter is that on principal I won't use a lossfull compression format as i just don't believe in throwing away data.(Why make something worse than it was)
I use lossless WMA files on a USB stick.
However, given tha that a car is certianlly nowhere near an ideal place to hear true hifi, I'd suggest MP3 at 320k as good compromise - I and I'd bet money you (and I ) would not be able to tell the difference.
(I know that sounds contradictory from me!)
At the end of the day, if you are happy with teh sound quality with which ever format you use, then thats whats counts. A lossless will however give you the best technical (even if not detectable) reproduction.