Set preferences for importing your music. As suggested above, it's best if you choose WAV or AIFF when extracting music from CD's. Two main ways, one is press
Import CD button at bottom left of window when viewing the CD songs list. Else, my preferred way is selecting all the songs or the ones I wish to extract, then go to Advanced menu & choose
Convert to AIFF (or WAV).
After songs are all imported. I change import settings to mp3 Variable Bit Rate (VBR). I then go to Library. Find the album, select the AIFF/WAV songs to convert, then go to Advanced menu & choose
Convert to mp3.
To add to iPod. Two main ways. One is Sync. That means when you connect your iPod, the iPod updates with the new playlists. You would need to create a playlist with your new songs to do it that way. My preferred method was to use Manual updating of iPod which allows me to drag & drop songs of my choice into iPod. iPod videos are available to see here:
How to transfer music to my iPod (& iTunes) {click on link}. Also see the videos shown at bottom of that page.
CBR = Constant Bit Rate. 160, 192, 224, 256 & 320 are CBR.
VBR = Variable Bit Rate. This allows a more balanced encoding. eg: silent spots do not need to be converted at a high bitrate. Likewise some moments in the song do not need to be encoded using lots of bits when it can be done with less. iTunes VBR does it in ranges of bitrates so is a partial VBR. eg: 256 VBR will encode at 256 up to perhaps 300. 224 will encode at 224 up to perhaps 275 kbps, etc. Perhaps it's only the vocal parts that need the extra high bitrate whereas some other parts can be encoded at the minimum chosen such as 256kbps.
Example import/CD extraction settings below:
Extract the songs from the CD:
Go to Library & select the songs to convert to mp3, change import settings to mp3:
.