As long as the mp3s are 192kbs or above, I'd be amazed if anyone will notice, and WAVs will take up an enormous amount of room.
I DJ casually, either from vinyl (which I massively prefer) or from mp3 if I need to use a simpler set-up or take a more populist approach. When doing the latter I use Mixxxx too, and an audio interface so I can monitor and sync using headphones.
For me, DJing is all about knowing your audience and responding to the context. I did a friend's wedding last weekend and although he'd said I could play anything funky, I figured many of the guests would want to hear stuff they already knew. So I switched between more obscure Northern Soul and Motown everybody knows, between Nigerian funk and James Brown, Chic and unknown but choice disco cuts. This is the advantage of mp3: you can turn up with a gargantuan back catalogue, making it easier to adjust in response to audience reaction. It seemed to work well.
When I play after gigs, at aftershows, parties full if musos, etc, I just play whatever I think will work next, worrying less about the populist punter.i suspect that the large-scale consumption of stimulants makes an audience more open to the "journey" but I don't suppose that happens so much amongst the tango crowd
The most fun I ever had DJing was at an NYE event where I was expecting to have to roll out the smash hits but instead chanced upon a strangely wide-eyed audience who were extremely receptive to some very heavy and deep house by 1am
A little bit of musical knowledge - keys, tempos, rhythms - seems to help me a lot but I suppose this is something you can just "feel" too.
Have fun!