What is the quality of the music sold in the iTunes store?
From this article:


  Music encoded as 256kbps AAC files first came to the iTunes Store in 2007 with the launch of Apple's iTunes Plus. That marked the debut of DRM-free music tracks encoded at a higher quality bitrate that Apple claims is virtually indistinguishable from the original recordings.


As of 2007 the audio files sold in the iTunes store have been encoded using the Advanced Audio Coding (AAC) codec and distributed with .m4a extensions from the iTunes store. The 256 kbps setting is an average bit rate encoding scheme, not a fixed bit rate encoding scheme. The actual sample rate is varied dynamically based on the content and time.


  Is this quality comparable to that of a lossless file or CD?


This is somewhat subjective. The encoding is a lossy encoding so from a purely bit-wise perspective the content sold in the iTunes store is not 100% identical to content from a CD -- when expanded back to a .wav format to match the bits on a CD, the expanded bits from the AAC file would not match perfectly with the bits on the CD because of of the lossy encoding. However, it is said, bitrate of the encoding used on iTunes files imparts no human-perceptible loss in the audio when compared to the source CD material. This sort of stuff is harder to verify, requiring double blind tests and the opinions of hopelessly fallible human beings.