I agree that MP3's are great for portability. I have a 75 gig HD full of my own mp3s (from my CDs). I use these for putting on my portable which is much better than carrying a CD player and all those CDs, imo.
I use to be a ripper, way back in the day for efnet. We used some high quality standards and had tested many standards to come up with what was thought to be the best settings in terms of size of file vs. quality of tracks. It was usually agreed upon that rates of 192-256 were best, stereo as opposed to joint stereo, a few other esoteric settings which I would have to look up, and typically fixed bit rate--unless the music was fairly dynamic as in classical, in which case variable bit rate was preferred--were the best settings. LAME is a very good codec, I think the second revision of the unpronounceable german named codec (you'll know it when you see it) is the best, but this is my own experience. Not all encoders are equal as the more veteran rippers are aware! Stick to either of those for the better encodings. I would like to experiment more on whether VBR or CBR is preferred on better recordings. I know the typical off-the-shelf major record release with limited dynamics typically sounds better with CBR but I can see the case for VBR on less dynamically limited recordings.
Another less conventional codec which I find to offer get size/performance is the mp3 rev 2 codecs that are out there. You need to update the players with the appropriate decoders to realize the gain though. MP3ver2's sound awful with the standard winamp but far superior to their reg mp3 versions with the right decoders.