What is the best compressed iTunes format?


First, let me state that I fully understand that an uncompressed format is far superior to a compressed on such as MP3. My current iPod is a 4GB unit, but I just had the battery replaced on my wife's old 30GB unit and plan to transfer my music that direction.

I generally use it for listening at work on Sennheiser earbud headphones that retailed for about $80 new so we're not talking HiFi. My only iPod connection currently, or planned, to my main stereo is via an Onkyo dock so I'm not getting the benefit of an external DAC so again we're not talking HiFi.

Knowing that I have somewhat limited space, what would you recommend for me to choose as the format for iTunes. I've never done anything beyond one of the lower compression MP3 options, is there something better?

Please provide a suggestion and why.

Thanks
mceljo
I just did a one song comparison of Apple Lossless, 128 AAC, and 192 MP3 and can't say that with my headphones that there is a significant enough difference to not just go with the AAC format that iTunes will do automatically. There is a small difference, but it's difficult to even describe so for non-critical listening on my iPod I don't think it matters.
Realremo - If I were planning to use my iPod for anything beyond listening at work on occasion I would probably be more concerned about the quality. I have an iPod dock at home that uses the iPods DAC and it sounds like junk no matter what format is used so on my good system it'll always be CDs for listening. I have all of the files in Apple Lossless so I'll be ready in case I ever get an external DAC and setup a music server.

Once I finish putting all of my CDs on my iPod I'll reevaluate how much space I have remaining and may manually load the Apple Lossless files for my best/favorite CDs if there is room. I think I'm about half way through the stack and have only used 5 GB in the AAC format so I should be able to load quite a bit in lossless.

I want to toy around with creating parallel MP3 versions, but with a new baby in the house it'll be a long process finding the time to do it.
I just ripped my whole collection at 320kbps VBR. Sound quality is very close to lossless, and file size is a little under half of what lossless typically works out to.

Maybe I should have done lossless but I am using a 64GB iPod touch for a source and it would not have been able to hold everything.

The downsampling option with syncing is useful but it would have been so much better if it didn't limit you to 128 kbps. I imagine if they ever come out with a new version of Itunes that allows this then I may wind up ripping my CDs one last time.

I do use the downsampling when syncing my iPhone. 128K is good enough for lower end earbuds and noisy environments, IMHO. Keep in mind that the downsampling sync takes FOREVER. It is definitely an overnight type of thing.
Once advantage to ripping in Apple Lossless and using the auto downsampling to 128 AAC is that if iTunes is updated in the future to allow other downsampling options I'll be set and ready to go at the click of a button and a few hours of waiting.