iTunes idiot needs some help

Hi,

Although I've owned an iPod for quite a while now I'm in need of some help. Up until now I've stored approximately 400 WAV files on my iPod. I recently bought two Western Digital 160gb external hard drives and I'm copying 400 CD's on to the hard drives using iTunes, importing the songs as WAV files (I bought all these CD's BTW).

I'd like to rip all of my music on to my iPod. To fit all this music onto a 20gb iPod will require compression, any recommendations as to which compression format to use would be appreciated. Priority is sound quality (I really hate the sound of MP3's) but by the same token I'll need to fit a lot of music on it. I'm very interested in your opinion and will certainly appreciate any advice.

I want to keep the WAV files on the hard drive(s) as is, allowing me to make compilations or copies of my CD's as required. The thing I can't figure out for the life of me: I have the WAV files on my hard drive and want to use some sort of compression to load them on the iPod while I maintain the original WAV files on the hard drive. There must be a way to grab the WAV files off my hard drive and using iTunes compress the files, store the compressed music in a directory on the drive, and then load my iPod with the compressed files. All the while keeping the original WAV files in WAV format on the drive. I'm running XP with the latest iTunes software. Thanks in advance to any iTunes aficionados who can lend a helping hand. Best Regards, Jeff