CD/lossless versus iTunes & Amazon downloads


I've been trying to search Audiogon for information on this, but seems like next to no one downloads songs from iTunes or Amazon.
For the past 5 years, almost all of my music listening has been done in front of the computer while working on other stuff. I've bought a mix or CDs and downloaded albums from iTunes and Amazon. There's tons of albums you can get on Amazon for $5 at an approx 256 VBR bit rate. (I'm just using an iMac with powered M-Audio monitors).

I'm about to upgrade to add a little DAC (HRT audiostreamer), an amp (NAD or MF A5), and running this through my Magnepan MMGs. Will this cause a big difference in sound between the compressed downloads and CDs? Any chance the mp3s will sound worse than they do on my current setup?
adnan
Great, thanks for the information. Mezmo hit on the actual question I was getting at before the word limit cut me off:
When you start compressing the files, what is the first aspect of the sound to go? I'd heard sound stage always took a hit first.
I'll have to do my own tests once I get set up to see how much the difference matters to my hearing. I'm also going to be adding a vinyl section to my new system, can't wait.
Mezmo'spost was one of the best posts I've read in quite some time.

If saving a few dollars is a priority, look for used CDs on Amazon. I've found a lot of stuff that was barely used for pretty cheap that I wouldn't have bought at full retail.
Adnan,

I suspect you will really notice the limitations of compressed music in comparison to vinyl.