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'd say bitrate is not arbitrary on ALAC files. Rather a measure of 'complexity'. If what you mean by arbitrary is that you have no control over it, that's also true. But not in the sense that somebody just picked a number. ALAC would seem to end up about 30% to 35% reduced from the original.
Very complex, rapidly changing or 'dense' music will get a higher bitrate than sine waves. Maybe I'll test this, later today. I think you may be on to something with file size/length math. I'll look over some of the large number of songs I've got in ALAC and look for a pattern.

The idea behind lossy files...and this applies to photography, too, is to only discard the least significant data. That which couldn't be heard (seen?) anyway.
Of course, this doesn't work well, at least at higher compressions. In Photoshop, I have a choice of 10 or more 'levels' of compression. Using extreme enlarements of small parts of a picture, you can clearly see what changes. The changes are most readily apparent in more.....complex parts of an image. Big enlargements are hurt worse than small prints. Images for monitor use are nearly immune!

Yes, processer overhead makes sense. Again, using photoshop as an example, when I make a big change to a photo, It can take several seconds to process.

I just decided early on, after experimenting with FLAC, to change over to ALAC. It was more.....painless, for me. And I Tunes makes it easy to 'downconvert' to a much smaller but still listenable MP3-160 bitrate. Album art is more easily manged, at least for me. That, and the fact I can stream music wirelessly to my stereo is the icing on the cake. I only wish the Airport Express were better clocked.
Why compress. Use AIFF. It takes twice the space as ALAC, but who cares? Disk is cheap.

Steve N.
Empirical Audio
Well, the downside of having iTunes convert to AAC when syncing to the iPod is when you mess up it takes a long time to redo it. I was trying to replace my best CDs with the Apple Lossless files and didn't set things right. Now I have about a 24 hour delay allow it to sync everything in AAC again. I think I've got it figured out for next time.