iTunes Home Sharing works for me to send playable Apple Lossless songs to iPhone / iPad and another Mac streaming songs.
There may be a problem with your setup since it is supposed to work and does for me. Perhaps someone else will chime in with their experience - but I have seen it work recently at several friend's houses as well as in my setup.
I'm fairly certain I would have noticed a problem back at 10.2.1 as much of my Beatles collection is stored in lossless format but I'm not 100% certain there wasn't a bug in a previous version of iTunes.
You could rule that out by upgrading to the latest iTunes 10.3.1.
I am guessing there is another problem but am at a loss to guess what it might be without more information on your setup.