Uncompressed PC to Compressed iPod?

I'm no expert, but I think first you would want to copy the library, then down rez the copied data to MP3. Then you haven't messed with your original itunes library as ripped.

Use dBpoweramp Music Converter to convert to mp3 while keeping the lossless files.

I too would love to know if there's a way to have itunes convert to lower resolution files on the fly, as it ports songs over to your ipod. It would take more time, but wouldn't require the file management hassles of making low res copies, moving them, then deleting them or somehow else tracking them in your library