if you want lossless do NOT go for mp3 format
if you are adament about using iTunes I suggest ussing the Apple lossless format (double so if you get an ipod)
if not I suggest <a href="http://flac.sourceforge.net/">flac</a> (free lossless audio codec) the lossless files are obviously bigger but the quality is bit perfect to the wav files ripped from the cd.
oh and for playing the .flac files may I suggest <a href="http://www.foobar2000.org/">foobar2000</a> it is my favorite audio player of all time.
If using linux I suggest amarok
If using OSX I suggest....iTunes with apple loseless :-P