MP3 is the de-facto standard in compressed music formats. I recommend that you stick with MP3. Who knows if other formats will be supported in the future. I'd hate to rip my whole collection of 800+ CDs to some format and find out years later that the format has been abandoned.
For my ripping, I have always used Audiograbber (now freeware)...
http://www.audiograbber.com-us.net/...combined with "LAME" a free MP3 encoder...
http://jthz.com/~lame/One handy setting for audiograbber...
go to: settings -> general settings -> naming tab
make sure "artist as directory" and "album as directory" are unchecked,
then check the "advanced" box, and enter this string (without the quotes)...
"%0 - %2 - %3 - %4|%2 - %3 - %1 - %4"
What this does is configures how audiograbber names your files...
...for single artist CDs, it uses the first half of the pattern...
ArtistName - AlbumName - Track# - TrackTitle.mp3
...for compilation (multi-artist) CDs, it uses the second half of the pattern...
AlbumName - Track# - ArtistName - TrackTitle.mp3
I keep all my MP3 files in one directory using this long filename system. It makes it really easy to use filename sorting to find what I want. I can also do a search on keywords in the filename to find all tracks by a certain artist for instance.