MergeFolderAlbums superfalse option?

[simbun]

From an archival standpoint FLAC is the only copy you need, as it's an open standard, represents the best combination of tagging and playback compatibility and because you can generate other formats from it as needed e.g. WAV, MP3 192/320k e.t.c. (given it's a lossless copy). I'm assuming at this point that you know they've been ripped accurately (verified by AccurateRip), and have CUE sheets where required (only really when the CD contains a data track or where the pregap does not follow the two second standard).
Obviously if you only have lossy copies of some albums and you don't own the CD then they'd need to be kept too (if there were some albums where you only had WAV I'd convert those to FLAC for the reasons mentioned above).

MinimServer (via MinimStreamer) as well as other music servers can transcode from one format to another on the fly, so you'd only need to index your FLAC files, configure the music server accordingly, and the control point would pick a compatible format that both server and renderer (PS3 in this case) supported.

For devices that aren't being served by UPnP and don't support FLAC (probably few and far between by now), or where you want to keep a copy of your library on a relatively constrained device (portable music players), then you would need another copy of your music, but unless you wanted the full library I'd be tempted to just convert as the need arises. I use a FiiO M5 for running but only load up a small selection of music files at a time, so it's trivial to convert from FLAC to MP3 as and when I want a refresh.

Having reorganised my own collection just over a year ago I know tagging can be an iterative process, so personally I would have created a master copy of your library containing one copy of each album (FLAC where available supplemented with other formats as needed), tagged that, then if you did need other copies just generate those from the FLAC files. With tagging all copies at once you're increasing not only your work load but also the risk of getting the tags out of sync (between formats), and you'll need to back up a lot more data as you go.

As always everyone is different, and there's no right or wrong way to do these things so feel free to forge your own path