Vinylmad814, I have a computer based front end, and have done extensive research in the areas of redbook CD playback and upsampling. The CDs you gave your friend can all be ripped to FLAC, or WAV, or AIF, all of these are lossless formats. WAV and AIF can be played by pretty much any software player out there, FLAC cannot be played back on iTunes to my knowledge. High-res files, i.e. 24/96 or 24/192 files you buy on HDtracks.com, can also be formatted into these same file types. What you will get from your friend ripping your CDs will be 16/44, which is the standard for CDs. 16/44 can still sound very, very good; like everything else, it is all about the quality of the recording.
Upsampling is not the same as playing a high res track. Your DAC upsamples the signal to 24/96 or 24/192, but the music signal you are sending the DAC is 16/44, if you are using the CD rips your friend is providing. Upsampling is pretty much what all modern DACs do, it re-samples the 16/44 track at a much higher rate, and it is supposed to push noise artifacts beyond the range of human hearing. Highs are supposed to "smooth out." I cannot really test the difference between a 16/44 track played at 16/44, and that same track upsampled to 24/192, because my current DAC upsamples only, I don't have the choice of non-oversampled playback. So I cannot say that upsampling sounds good or bad, I got into this computer-based-audio thing kind of late. I can say that my PC-rig mops the floor with my Denon changer in sound quality, but the cost differential makes that comparison unfair.
If you purchase iTunes music in 256K mp3 format, those are *not* high res files. the MPEG3 codec cannot push high-res data at that low of a rate (256K).