What is the best compressed iTunes format?

My two cents, rip everything lossless. Full stop. Eventually, you will come to regret it if you do not do it right the first time. Whether that is AIFF, WAV or Apple Lossless really dosn't matter -- they are all bit perfect and cross-convertible. Storage is super cheap, get them ripped and archived, and know you have them. As beteen lossless formats, don't know any real sonic difference personally, but AIFF or WAV is thought by some to be better, as both are bit perfect and uncompressed. Apple Lossless is in fact lossless, but compressed to about (I thought) 1/2 the size. I use AIFF, but not sure it's important.

Now, all that said, when you put them on a portable unit (ipad/pod/phone, etc), I always set the synching preferences to automatically convert to AAC (the compression/trimming ratio from AIFF to AAC is about 10:1). This way, you have the benefits of everything archived lossless, while your portable versions -- where the format just ain't going to get you that much of a differnce and putting a premium on quantity over quality makes sense at least to me -- convert automatically. Just to re-tweak the math, let's guess that 500 CDs would run you roughly 300gigs AIFF (think I actually have > 700 just north of 350gigs, but anyway). If you set it to automatically convert to AAC when synching, you can easily fit all 500 CDs on a 32gig ipod. Just saying....

Finally, you could rip things twice and essentially have two archived libriaries on disk someplace -- but it's a lot easier to rip lossless and then have a program do the converting for you. As you can go lossless to more compressed, but not the other way -- just make sure to start with lossless and you only need to rip once. Wether you ultimately keep sets of each or just convert on synching is up to you. (The only practical difference that I am aware of is that synching takes significantly longer if you are also simultaneously down-converting to AAC. 300 gigs could run you over 10 hours, so a good overnight task.) Just my two cents.

Mezmo,

If I were planning to rip everything again from scratch I'd probably take your advice. I don't do anything, at this point, on my main system outside of my CD player so having the lossless files isn't an issue right now. I'm just planning to rip my new CDs in Apple lossless and will go back to "upgrade" only a select few of the ones that are already ripped.

I didn't realize that I could down covert to the iPod, that's a great feature. Thanks!

I'm planning to rip a couple of songs in multiple formats and do some comparison listening on my headphones. We'll see how strong the placebo forces are soon enough.

Yea, I've ripped 500-plus CDs twice, and don't recommend it one little bit. Unless you're either starting from scratch or really biting the bullet for a total conversion to a computer-based source, no reason at all to redo everything. Sounds like you've got the perfect plan. Cheers and enjoy.

Rip without any compression and then create separate libraries for iPod compressed files. It will save you the time and effort of ever having to re-rip as your library evolves. I believe this is along the lines Mezmo suggested.

Apple AAC and apple lossless both use mpeg4 compression, apple lossless is simply compressed at a MUCH higher bit rate, and its variable compression. If you get into the specs, apple lossless has a bit rate of anywhere from 600kbps to 1100kbps, + or -, depending upon the track. AAC only goes up to 320kbps. AIFF is ripped at 1411kbps, which tells me that its a more true lossless format than apple lossless. I don't have any WAV files.
Your optical drive and the ripping software you use matters more than which file format you pick (AIFF, WAV, FLAC, etc.) when talking about bit-perfect rips.
I have Audio Tecnica earbuds, which are OK, not great, and I can hear the difference between a 320kbps rip into .mp3/AAC, and a 1411kbps rip into AIFF. More frequency extension and detail. I only rip AIFF and apple lossless, I avoid the lossy formats. Can I hear the difference between AIFF and apple lossless? Not really, not with the earbuds. If I went from my laptop through a DAC into my system, maybe. I recommend apple lossless, its a great middle ground. I don't want to listen to my favorite music at work knowing that I am missing something in the sound because the file format is clipping the waveform.