How much can your iPod hold?
You can figure out how much hard drive space you need. 320 kbps = 40 KB/s. You want to store about 250 CDs, and I'm going to estimate about 45 minutes of music per CD on average. That gives you about 190 hours of music that you want to store.
So, 190 hours * 3600 seconds/hour = 684000 seconds.
At 40 KB/s, that's 684000 seconds * 40 KB/s = 27360000 KB. That's about 26 GB of storage that you'll need.
For reference, I ripped 200+ CDs in a lossless format (AIFF) a few years ago, and they took about 120 GB of space.