I rip all my CDs to AIFFs so there's no loss of information.
On iTunes, there's an option to DYNAMICALLY create AAC versions of the full resolution AIFFs when transferring to an iPod/iPhone/iPad etc. So I use the maximum setting 256kbps.
This way, I have a bitperfect back up of my CDs and I get to maximise the storage on my iPod Nano 8GB. FWIW, I use AIFF on my Classic 160GB as well. I can't fit my 1-2TB of music in there so I just sync playlists and specific albums in full resolution.
On iTunes, there's an option to DYNAMICALLY create AAC versions of the full resolution AIFFs when transferring to an iPod/iPhone/iPad etc. So I use the maximum setting 256kbps.
This way, I have a bitperfect back up of my CDs and I get to maximise the storage on my iPod Nano 8GB. FWIW, I use AIFF on my Classic 160GB as well. I can't fit my 1-2TB of music in there so I just sync playlists and specific albums in full resolution.