In mid-bitrates, 128-160kbps, I think Vorbis (aka OGG) is the best, followed by MP3, and worst of all, WMA. I haven't listened to AAC, but I imagine it's somewhere around Vorbis or MP3. The quality of MP3s seems to vary the most between files at the same bitrate, which I think is because there are so many different encoders, some especially bad. I don't claim to have especially good hearing, but I've found the 128 kbps WMAs you get from services like Napster to have noticeable and distracting artifacts, which along with the DRM is why I refuse to pay current rates for such services.
That said, I rip all of my CDs to
FLAC. (Lossless compression, usually to about 60% of the original file size) There are a few reasons for this:
-Obviously, it's True CD quality unlike the "CD quality" which is not really CD quality at all claimed by many lossy codecs at low bitrates.
-Hard drive space is extremely cheap nowadays, so having large files is not much of a problem.
-If my original CD is damaged, destroyed, or lost, I have a perfect backup copy.
-It's not a practical format to put on a portable player, but the files can be easily recompressed into any other format without the additional quality loss caused by redoing lossy compression.
-Unlike WMA Lossless, Apple Lossless, et. al., FLAC is free as in freedom. (I guess this is probably not much of a concern to most iPod owners though) This is another reason to prefer Vorbis for lossy compression in addition to the fact that it just sounds better.