I've never quite understood the 'MP3=bad quality' notion. I always thought that, provided you rip at say 160 or above, all the losses are sounds that the human ear is not capable of detecting, therefore to me and you it sounds the same.
To some it sounds the same, to others it's distorted. The sound quality of any lossless encoder is lower, how much,if any that offends the listener is in the ears of the listener.
In my experience (using digital connection to a Denon AVR 3802 from an Audigy2) my MP3s @ 192 kbps sound just the same as a .wav
I can clearly hear the difference at 128, I don't think I can hear any difference at 256, everyone has a threshold where they can hear the differnce, assuming their equipment can present the sound in high enough quailty to expose the difference. If I used a portable player, I would use lossy encoding for space concerns.
What if I used mp3 to encode at a level where I can't hear the difference today, and then later I begin to hear the difference? Too late, the bits are gone..... And then that would mean re-ripping millions of cd's. So I use ape, hd space is cheap these days, and I can sleep better at night not worrying about those lost bits....