I don't think you can categorize yet. I don't know if you can rip directly from a disc to the HD, but if you already have a catalogue of files you can either put them on a memory card or burn them to a CD and drop them in there. What codec isn't the entire answer, bitrate is - you need to rip at least at 128k, preferably 192k or higher, for better fidelity. At 192k I can't really tell the difference between MP3 and CD, but file sizes are larger obviously as bitrate goes up. According to a friend, ATRAC (Sony) is a better compression method giving better fidelity with smaller file sizes than MP3.