You can turn your computer into a recording studio with all of the features used by professional audio engineers. It's inexpensive, has a very intuitive interface for a beginner and supports many sound file formats. Audio information is stored on a CD in a form similar to a WAV file. There are many shareware programs that do this, and some are even free. I recommend downloading Real Jukebox from RealNetworks for extracting sound from your CDs.
Compression results in a loss of some sound information.
Your files should use the full range of available amplitude. Amplitude refers to the relative height of a waveform. A sound's loudness is a function of its amplitude. If you don't already have a sound recorder on your computer, use Cool Edit as your sound recorder and use the settings that give the best quality. Don't worry about the disk space because the file is only temporary.