We're not talking about listening to Brahms or Mozart here. We're talking about voice acting, sound effects, explosions, etc. Most DVD audio runs Dolby Digital at an aggregate of 384Kb/s for dialog, music scores, etc for 5.1 channels. I think youd be hard pressed to tell the difference between 128kb/s or 192kb/s for voiceovers and sound effects in a video game. Now if you want to record the background music in a higher format i can live with that.
In addition, i think the sounds WILL be in WMA based on this comment from Todd Holmdahl:
Sounds like WMA doesnt need to touch the CPU to be decompressed so it will probably be the codec of choice anyway. EDIT: On the 360, that is.