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Second, you will want to install the foobar encoder pack and set up qaac (here's the qaac wiki). In short, apple's AAC/ALAC encoder in iTunes is the best around (better than Nero, Fraunhoefer, ffmpeg, etc) and ensures full compatibility with iPods. But fuck iTunes, you know, for being difficult. So qaac takes the encoder binaries from your installation of iTunes and sets it up as a standalone program which you can use however and wherever you want. So you set up qaac and then tell foobar to use qaac to do all your AAC/ALAC encodings and you get the benefits of apple's encoder without the nonsense of iTunes being uncooperative.