To do this, of course, it must be re-encoded using Apple Lossless (an option in iTunes), is that not true?
< shrugs >
owwno.
You control this at the time the song is being ripped from your CD.
Of the CDs I've ripped (must be over 100 by now), only 1 seems to have had a bad transfer. Otherwise, I can't tell the difference between .aac and CD... but .aac takes up considerably less space.
Audio Snobs continue to insist they can detect a difference, but I have yet to see this tested under controlled conditions (i.e., you don't know which format you're listening to when you rate it).
It adds a selection onto the context menu that drops down when you right click on an MP3 file. You can convert to any bit rate as well as ther file formats, provided you've installed the proper codecs.