I just recently got an iPod 40 (regular) and had spent three nights ripping my 300 CDs into ALAC format in anticipation of receiving it. 1100 songs in ALAC take up 30 GB, leaving the othe 7GB free.  A lot of storage, but lots of variety as well.

The one consequence of this is that battery time is reduced to about 10 hours, or maybe that's just my usage. But ALAC songs sound absolutely amazing, even on the earbuds. People asked me if it sounded absolutely incredible - I told them they can't expect anything more than CD quality, but it is better with Apple's earbuds than it is with most earbuds that come with other players, and it does have CD-quality sound. My Mum was absolutely breathless when she heard Tony Bennett's version of "I left my heart in San Francisco", so that's good quality.

I would buy music from iTMS, but only to sample, if I liked the album enough I would get the CD, because despite the fact that I don't own the music, I like the notion of owning a disk with the music as close to original quality as possible, short of going SACD or DVD-audio. AAC 128 doesn't appeal to me though, so likely I won't be buying any AAC songs. When they start offering ALAC versions, then I'm in for those rare songs (If Apple actually has them, which I doubt) that still remain in my wanted list, but are typically on rare or expensive CDs (For example, Hayden the Canadian alt musician has an amazing song called "Trees Lounge" on the soundtrack to the movie Trees Lounge. Everything else on the album sucks except for that one song. Give me an ALAC version and I buy, but the soundtrack is so rare because it was a no-budget, no-promo movie (Great movie though, check it out if you can) that it's a $30 CD.

 The iPod in general is great fun, but someone ought to do a cartoon of huge scratches on the back of it with the quote:

A: Hey, your iPod is all scratched up, did your dog attack it?

B: No, I tried rubbing off the smudges with a tissue.