What Vinnie said.
WAV is basically the standard for lossless audio. It's also the best format as a starting point for encoding to any other (ie: MP3, OGG, FLAC, etc). So once you send CD Baby a WAV, they'll use it as a master for making all the other formats they're going to distribute.
FLAC is lossless too, but it's not as widely supported and it probably has to be converted back to WAV before you encode it to anything else anyway. Is CD Baby really asking you to upload FLAC? Because that doesn't sound right to me. If I recall, there's two ways to get them the tracks for digital distribution: 1) Mail them a CD with your tracks on it, or; 2) Upload WAVs.
CD Baby has pretty good customer service from my experience, so if you're still having problems just send them an email.
Oy. Don't get me started.