...granted, I'm new here, but *this* is something I can contribute to.
There are some half-truths mentioned here, primarily based on old information, and while apple lossless is great, it's about 4x-10x as large as a properly encoded mp3.
It ALL depends on how you rip the music, and how you encode it. The variables are:
quality of rip (the initial data that's pulled off of a cd...a bad rip will give you audible pops)
encoding algorithm (just purely the 'machine' that that initial data is fed through...a bad or old algorithm will give you shitty results no matter what the bit rate is)
bit rate (the amount of data that's allowed to stay after it's been fed through that machine...everyone's familiar with bit rate, but that's only part of the story.)
A non-scratched-to-hell cd that's ripped with Exact Audio Copy (on a PC...Max on a mac is similar but not AS good), and encoded with the current LAME encoder (go to hydrogenaudio.org to find out what the current recommended compile is...at this point, it's 3.97 I believe) at V2 or V3 will be *transparent* to the ears. Almost almost almost nobody will be able to double blind it from the original.
LAME is an open-source encoder, and it's been tweaked phenomenally to provide mp3's that are leaps and bounds better than what was produced when mp3's were first hitting the scene.
So, if you do your mp3's correctly, you'll end up with appx. 200kbps files (it's variable bit rate, so it devotes more bits to complicated music, as determined by the algorithm's analysis, and less bits to the 'easy' portions of a track) that will sound awesome!
For a detailed 'how-to', visit bestmp3guide.com (i'd link it, but i'm not allowed to yet...and it's a temperamental site, I've had it not work on some days, and others it's fine.)
The following is from the hydrogenaudio LAME wiki page:
High quality: HiFi, home or quiet listening
-V3 --vbr-new (~175 kbps), -V2 --vbr-new (~190 kbps), -V1 --vbr-new (~210 kbps) or -V0 --vbr-new (~230 kbps) are recommended. These settings will produce transparent encoding (transparent = most people cannot distinguish the MP3 from the original in an ABX blind test). Audible differences between these presets exist, but are extremely rare.
Personally, I rip mine at V3, because the majority of my listening is done through my (quality) headphones on my iPod...once I get my system set up in the house, i MAY re-rip my favorite albums to V0.