AAC, AIFF, Lossless, MP3

Only you can tell but when I tried all the different formats I found mp3 encoded at VBR 256 offered the best compromise between quality and space. In fact, my entire 40K song library is encoded in this format. In my system, and through the internal DAC of my Cary 306 SACD, I find the sound quality to be very close to the original cd. The difference is in micro details, soundstaging, and imaging.

Thank you for your responses thus far. So MP3 is arguably the best size v. quality compromise for an iPod? Am I correct in assuming that all you experimented with the different bit rates using iTunes?

Tobooe, I too have a Cary CDP and have been dying to use the DAC input! Are you going from a PC directly into the player?

I choose the Nano because of its size. I use it for running and cycling and can't wait to try it with those Nike sneakers... lol For the time being, I'll be using the regular headphones. Later, I may upgrade...

I really do appreciate any input you may provide!

Thanks again.

I agree with Tvad that, if you are taking the sound from the earphone out of the ipod, you likely won't hear much of a difference b/w lossless and a 320VBR. On the other hand, if you take the sound from the line out (which makes a HUGE difference) and if you have high quality cables, headphone amp, and earphones, you will definately hear the difference and you will want less compression than any MP3 codec will provide -- i find that anything other than lossless is a disappointment. One thing I do to preserve space is to selectively synch the music on my computer so that not everything goes to the ipod all the time (e.g., some of those 80s hairbands are in low enough rotation at this point that i don't feel i am losing anything by keeping them off the ipod).

there are a few lossless codecs that are actually slightly more compressed than Apple - such as FLAC -- that i believe ipod will suport. the space savings won't be major, but may give you a few more discs on 8GB of memory.

if you haven't checked it out yet, i suggest you visit www.head-fi.org. you will find out all you ever wanted to know and more about the world of portable music.

portugal11, i actually use the Sonos wireless music system. It has a digital out that I then send into my Cary 306.

For encoding, I use EAC using LAME encoder. I never tested other formats like AAC, OGG, etc.

Portugasl - just so you are clear, there is no iPod output that goes to a DAC. Both the headphone and the line out (USB/dock) provide an analog signal. As far as quality goes, my experience is like Jeffreybowmans - up the quality of the righ and you will hear it. I also agree with him that using the sync feature is the way to manage the content.

Let me leave you with another thought. Like a lot of people you are backing into hard drive based digital. My prediction is that this will replace your transport in the next 24 months. From that perspective spending your time ripping to anything less then lossless means that you will be going back to rerip your CD collection again - soon. Look at the big picture and manage what you carry around as opposed to limiting how you will manage your music in the future.