As far as I am aware all the solutions for playing Apple Lossless in WMP12 still require a DirectShow filter. The most common choice being the DC Bass Source one written by Milenko Mitrovic and that being the result of my prior research and suggestion to Milenko. This worked fine for Windows XP and Vista but for Windows 7 and later there are a couple of extra issues to accommodate.
Firstly with WMP12 Microsoft introduced Media Foundation as a replacement for Directshow. Media Foundation codecs take precedence over DirectShow filters and you therefore need to disable any potentially conflicting Media Foundation codec. As WMP12 includes support for AAC files with the .m4a file extension which is the same file extension as for Apple Lossless you therefore need to disable the built-in AAC support. I found the easiest way was to install the Shark007 Windows7 Codec pack which not only includes support for playing Apple Lossless files but also has a tick box for disabling the built-in Media Foundation codec.
Secondly, Microsoft willfully chose to put Apple Lossless files in the 'other' section of WMP rather than the music section, even though they have the same file extension, same file format, and same tag format as AAC files. You can consider this to be like WMA vs. WMA Lossless.
Note: WMP12 has besides normally having built-in support for playing AAC files, also has built-in support for reading MPEG4 'atoms' i.e. tags. It even supports reading embedded Album Artwork from .m4a files - both AAC and Apple Lossless.
This problem with Apple Lossless files being (incorrectly) placed in the other section can be fixed by installing the WMPTagPlus plugin. Thanks go to Tim De Beats for solving this problem. In this case the WMPTagPlus plugin merely tricks WMP12 in to thinking Apple Lossless files are AAC files, it does not need to do the tag reading as WMP12 can already read these tags.
So the full solution is to install the Shark007 codec pack, and the WMPTagPlus plugin. These can be downloaded from the following links.
http://shark007.net/
http://bmproductions.fixnum.org/wmptagplus/
Note: The above solution lets WMP12 recognise Apple Lossless and AAC files as music files, and lets it read the meta-tags in those files including album artwork. As a result Microsoft Media Center can also play those files. Unfortunately as this solution is based on a Directshow filter, the files cannot be streamed from WMP12 as this only works with a Media Foundation codec.
isn't wmp in 7 supporting m4a out of the box? – OrangeRind – 2009-09-19T04:51:12.070
@OrangeRind Apparently .m4as are okay, Windows Explorer is even reading the meta data on its own. ALAC isn't supported though. – deceze – 2009-09-23T03:31:14.240