You can use either of the point cloud formats. It use to be that you had to use the XYZ because the LAS only came out in WGS84 and the coordinates were backwards from what Carlson used, but now both can be exported to your local state plane projection. I have always used the XYZ because that’s what worked, but am now using the LAS because I have read that it may be better, but I don’t know that for sure. I do see that the LAS files are larger, but I don’t know if is because they contain more information or because the XYZ compression is better. That might be another topic to start…
Wisconsin has three projections depending upon where the jobs are at. Spring Valley is in central EPSG 2288, but there is also north 2287 and south 2289.
Beyond that you can download the orthomosaic in the same projection and drape it over the point cloud. Good luck and let me know if you have any questions.