I found this articlehttp://www.pointsinfocus.com/learning/d ... lossy-dng/
You can either use the latest version of LR or the Adobe DNG software to convert both seem to be the same thing.
The file size reduction is in some cases pretty huge with lossy, even just straight conversions to DNG seem to offer a decent reduction in size with no penalty.
I'm of the view that it could be useful..and that in some cases you have data that is empty or wasted or not being effectively compressed.
Bit like me making a 50mp ISO 400 neg film scan..sounds great but really I might have 10mp of data.