WAV is a lossless format like FLAC. And you can convert WAV to FLAC to reduce file size after recording.

You may also use free sound editor called Audacity to record any sound produced by your sound card. But it doesn't support song splitting and tagging.

Also you don't lose any quality when downloading/capturing/ripping audio stream, so it is always better to use stream rippers/recorders than direct sound recording software like Audacity.

I suggest you to consider streaming media recording and streaming audio recording software before recording from your sound card.