honestly, i think they're FLACs (or equivalent). i have checked the audio quality from some test recordings of tracks i bought and they are absolutely pristine, with plenty of signal at and exceeding 20kHz (the primary method of determining quality, though it's possible they are compressed at 48kHz or something), and they may even be 24bit (though that is what i recorded at, so that's neither here nor there).
judging by how long it takes me to download the tracks, as well – they're quite huge, and not just for long songs – i'd say they are of seriously high quality, comparable to lossless.
the only bad thing is that they have added compression (the effect, not the data crunching to make lossy encodes) to the instrument tracks in order to make everything heard easier. for instance, if you put all of "The Mirror" together using the individual instrument tracks, the quiet part is noticeably louder than it is on the record. not to mention every I&W track seems to be a completely different mix from the actual album, even if you just listen to the instrumental versions that accompany the vocal stem. (still have triggered drums, though!)
overall i think Jammit is amazing, i just wish they'd do less touching up on the individual instruments from an audio engineer standpoint. works great for musicians learning to play, though. really hoping to get some SDOIT tracks in there soon, once they presumably finish SFAM.