Hi,
As many have already said in this thread, in theory, during playback, we must be able to reproduce the same samples from FLAC, after decompression, as from WAV. Also, as many have said, they find that WAV sounds better. I have come across the same opinion in other forums as well. I have tried both and I am not gifted enough to notice differences. Also, my entire chain and room has several limitations, which would be shadowing these differences by a tall order. Anyway, I've tried to find a logical explanation for the reason behind the differences heard by people. Only reasons I could think of are:
1. WAV playback requires less CPU/Hardware effort compared to FLAC playback, as no decompression is involved in extracting samples from WAV. Hardware can therefore run slower and at lower voltages, due to lower processing demands - most of the processors these days, even entry level embedded ones, support dynamic voltage-frequency scaling - DVFS, which is again software controlled. This translates to less switching activity in the digital circuitry which in turn reduces power supply noise, noise in interfaces between components and cross talk between digital and analog.
2. Many commercial products originally provided only WAV support and FLAC support was added later as a software update (or afterthought). Manufacturers only choose modest CPUs in their products, during development, to cut down cost. To this end, companies extensively profile their embedded software on various processors and pick ones which minimize cost, barely meet the known processing requirements and leave some headroom for future S/W upgrades, which they foresee at that time. When a requirement like FLAC playback comes up later, companies try to support this feature by a software update, and they will then have to use raw CPU horsepower to handle FLAC decompression, on-the-fly. An increase in the CPU activity would increase the noise in the system. This point mainly applies to dedicated media centers with embedded DSPs and not general purpose computers, like PCs and laptops and even Raspberry Pies.
In later generation of products, companies may choose better CPUs as FLAC playback capability would have then become standard and they would have learnt the limitations of older CPUs while profiling new S/W as well as from the customer outcry on their tech-support forums. These newer CPUs may come with H/W accelerators, which are peripherals optimized to carry out certain operations faster and at the same time, by consuming less power, compared to the case when raw CPU horsepower is used for these. If FLAC playback can benefit from those peripherals, then CPUs need not be run as fast, and all this will reduce the digital switching noise greatly in newer generation products.
With regards,
Sandeep Sasi
flac Sounds somehow more digital and wav sounds more natural (to me). But also could be placebo. Anyway I had disk space so I have most of my library now in wav. 
