it encoes as AAC, not AIFF by default. AIFF is similar to WAV, AAC is based on the mpeg4 standard and offers better sound quality than mp3s.zac850 said:Another note is that iTunes, by default dose not import CD's as MP3's. It encodes as AIFF files. If you want to import as MP3's you can change that under preferences:importing.
I would suggest leaving it to import as an AIFF file, you get better quality for a given size. You can convert it to MP3 later, if you wish, or you could burn them through iTunes as an MP3 CD (preferences:burning).