Take prontospyder's advice. LAME is the best sounding encoder at the moment. Plus you can get it for free, legally. It comes with cdex that he links to.
Set the encoding properties to variable bit rate, quality level 2, 3, or 4, depending on how big you want your files to be (2 is better quality, larger file, 4 is good quality, smaller file) don't go any higher (lower?) than 4 (i.e., not 5,6,7,etc.). I like 4. Choose Joint Stereo and set the minimum bit rate to 96 kbps. You will be amazed at how good the resulting mp3 file sounds, even on audiophile-grade high-end stereo equipment.