After a lot of experimenting, I'm doing LP to CD transfers with excellent results. In my view, the project has three stages: 1) Extracting the analog information and converting it into a digital file as accurately as possible; 2) Cleaning up surface noise; and 3) Burning a high-quality CD. Here is my process:
1. First, the record is cleaned with a VPI 16.5. I play it on a Harman Kardon T60 turntable + Grado Prestige Gold cartridge connected to a Parasound P/HP-850 preamp. The preamp is connected to a Turtle Beach Santa Cruz sound card in my computer. This card is highly regarded by some for its analog-to-digital conversion accuracy. For recording, I use Audio View 32, an application bundled with the sound card. Before making the final recording, I play a few tracks to monitor and set record levels. The objective is to get the record level as high as possible without going into the red and distorting the recording. When I used to make cassettes, I could get away with this, but not so with a CD. I record each side of the album as a single WAV file. You can do the entire album as a single file, but if your computer has a slow CPU, manipulating a file that large can seem slow.
2. Next is the most critical part of the process -- cleaning the recording. I use an outstanding shareware application called Wave Corrector 2.4 (http://www.wavecor.co.uk) to remove clicks and pops. This app does a far better job than anything else I've tried. It's not a sonic filter -- it repairs the file by altering the wave form. Its automatic mode does a great job but also allows full manual editing of the wave form. This can be tedious, but it's highly effective for repairing surface noise too similar to the underlying music for Wave Corrector to discern. All this is done without subtracting music information. At this stage, I break up the WAV file into tracks. WC can do fade-outs and fade-ins for tracks that flow into each other, if I want to break them up.
3. Now I burn the clean tracks on to a high-quality blank CD. I use a Yamaha CRW-F1 burner with Nero 5.5 as the burning application. The CRW-F1 is optimized for music burning (see Yamaha's web site for details).
The result is (in my opinion) a CD that sounds as good as any mainstream CD recording out there and better than most of them. Obviously, the variables in the process -- the quality and condition of the hardware and the vinyl, the cleanup job -- will have an effect for better or worse. But even with a setup like the one I described, the results can be amazing.