I ripped everyting AIFF, storage is cheap. But all of the lossless formats are theoretically interchangable (and cross-convertible) in any event. Some folks will argue themselves blue that some sound better than others -- and among those that do the consensus indeed seems to be AIFF over apple lossless -- but I've personally never experimented to hear a difference. The trick is getting a lossless archival format, backing it up (and do back it up), and then you can do pretty much whatever you want with it.
However, whenever I put anything on my ipad/pod/etc, I always convert to AAC for space reasons (which is also easily done). Unless you're only using a setup that will bypass the DAC on the ipod and get you the benefit of the lossless files, AAC v. lossless through the ipod DAC is likely not a difference you'll appreciate all that much. On the other hand, if you're in fact bypassing the DAC through something like your Wadia, going into a standalone DAC (which again you are), then by all means -- you definitely want lossless. But, remember, you can always go straight from your computer to the DAC and bypass the ipod/Wadia combo entirely to the same result. I know, not what you've got in mind, but an option.
Personally, I use a 30-ish gig ipad and a 64g ipod touch, so space is an issue and neither could come even close to fitting what I want on them lossless. On the move, that does the trick. If I want real sound, I run the AIFF files directly from the computer into the DAC, and then through the full getup.
In terms of space, figure that AIFF to AAC is roughly a 10:1 compression (and trimming) ratio. Average AAC track: ~4mb; AIFF ~40mb (with significiant variation). AIFF, 160g will thus get you, give or take, roughly 4,000 tracks. If that's enough, then you're all set. Apple lossless, if I'm not mistaken, might come close to doubling it. AAC, while crappy and lossy, will get you 40k tracks (give or take a lot).
Ultimately, it all depends on how much software you've got and how you intend to use it. But, personally, I'd rip lossless and uncompressed (AIFF) in the first instance. From there, you've got nothing but options regarding how much and in what format you want to also put stuff on portable devices. Having ripped my whole collection twice -- once AAC before I knew better and then again AIFF -- you're definitely wise to think about doing it right the first (and only) time. Final tip, when ripping through itunes, make sure to set your importing preferences to use error correction. Might take a smidge longer, but, again, you wanna make sure you get it right the first time.... If you're interested, Ayre's website (http://www.ayre.com/usb.htm) has a good primer on optimizing computer based systems (and I don't just say that 'cause I bought an Ayre DAC; a great resource). Best of luck.
