There are many ways you can do this actually. The easiest way is probably to configure iTunes to convert every inserted CD to AIFF format. QuickTime can also do this for you. QuickTime will let you digitally extract the data and save it as an AIFF file. There are also many shareware applications out there that will perform the same function.
CD audio takes up an enormous amount of space.
Extracting more than a few CDs to your hard drive will add up fast. I suggest you either compress with MP3 at very high quality settings or look into a codec like QDesign. Even at the highest quality settings you will save considerable amounts of space, though with the latter of these two compression technologies you will have to allocate a fair bit of time to compressing the data. Because you are using your computer rather than a consumer CD deck, to run your hi-fi, you can use any compression algorithm you choose. This column is insightful, heartfelt, and instructive.