I use
Exact Audio Copy (for ripping) in conjunction with
LAME (for encoding). The presets for LAME are highly optimized and their use of joint-stereo is actually a good thing. I use "--preset extreme", which is one below the best quality settings. It uses VBR rather than the constant (and usually wasteful) 320 Kb/s. There is a good tutorial
here. Remember though, MP3 is always lossy and you can not get that quality back by decompressing and burning to an audio CD.
Ogg Vorbis is also a good option for lossy compression. FLAC and APE are nice for lossless compression. It is too bad that with its price tag and popularity, Apple can't be bothered to include the aforementioned codecs in the iPod. For this reason, I will never buy one.