It means that there's no loss of fidelity. If you convert raw audio (a WAV for instance) to MP3, vorbis, or other lossy formats and then convert it back, you'll

It means that there's no loss of fidelity. If you convert raw audio (a WAV for instance) to MP3, vorbis, or other lossy formats and then convert it back, you'll end up with different (lower fidelity) data. Doing the same with FLAC or another lossless format gives you the exact same data back. In the image space, PNGs are likewise lossless, whereas JPEG causes a loss of fidelity.