How do I digitize an analog telephone recording and filter it with a Chebyshev filter?
Unless you have tight space constraints, I would stick to lossless formats like good old WAV. Phones do not pass much high-frequency content so you should be fine with a 8KHz Mono WAVE file. You will however want to keep the bit depth high, say to 24 bits, since you want to process the audio. Once you are finished with your processing you can compress with a lossy codec, such as OGG.
All codecs (coders/decoders) may be classified as lossy or lossless. Lossless codecs, as their name implies, allow for perfect reconstruction of the original signal. Lossy codecs, by contrast, merely approximate the source. By forgoing perfect fidelity, lossy codecs enable higher compression ratios, commensurate with the amount of degradation one is prepared to accept.