A couple of points of clarification for anyone who hasn't explored the option of putting your music on a hard drive.
iTunes and mp3's don't necessarily have anything to do with each other. iTunes is an application that runs on either a PC or a Mac and is used to organize and play music files. Those files can be in any of several formats, including AIFF, the same files that are on your CD's. You can also manage mp3's or several other file formats but the choice of quality and file size is entirely up to you.
In the same way, the iPod and mp3's don't necessarily have anything to do with each other. It's possible to store and listen to many different file formats on the iPod, from uncompressed files identical to the originals on your CD's to highly compressed mp3's. Again, it's your choice, based on what kind of fidelity you require and how much music you want to store in a given space.
And, it isn't necessary to have an iPod to use iTunes. iTunes is the tool you to load music to an iPod but it works wonderfully well on it's own to play music through any of the devices recommended in the posts above.