Picking Song Quality Levels

After you select a format, you decide the quality with which the music will be encoded. Higher quality levels mean better-sounding music, but larger file sizes. If file size is not a problem, then choosing a higher quality setting is the way to go. If you have relatively little disk space, you might want to experiment to see which is the lowest quality setting you can choose that results in music that still sounds good to you.
Note that when it comes to music, quality is in the ear of the beholder. Also, it heavily depends on the type of music you listen to as well as how you listen to it. For example, if you listen to heavy metal rock using a low-quality pair of speakers (in other words, cheap speakers), quality will be less of an issue for you because you likely won’t hear any difference anyway. However, if you listen to classical music on high-quality speakers, the differences in quality levels will likely be more noticeable.
The trade-off for quality is always file size. The higher the quality setting you choose, the larger the resulting files will be. If you don’t have disk space limitations and have a discriminating ear, you might want to stick with the highest possible quality setting. If disk space is at a premium for you, then consider using a lower quality setting if you can’t detect the difference or if that difference doesn’t bother you.

Choosing a Format Option

Although I am sure that going into the specifications for each kind of format would make for fascinating reading, there isn’t really any need to get into that detail. Frankly, the benefit of using an application such as iTunes is that it manages all this complexity for you so that you don’t have to be concerned with it. If you are like me, you just want to work with the music, not diddle around with complicated settings.
Generally, when you add music to your Library, you should use either the AAC or MP3 format. Because the AAC format is better (with better meaning that it provides higher quality music in smaller file sizes), it is usually the best choice.

Setting Other Organization Preferences

The location of the folder in which your music will be stored is likely the most important part of the organization preferences. However, you’ll need to understand a couple more preferences.
These are also located on the Advanced pane of the iTunes Preferences dialog box:

• Keep iTunes Music Folder Organized—This preference causes iTunes to organize your music as described earlier—that is, by artist, album, and song. Because this is a logical way to organize your music files, I recommend that you leave this option active by making sure this check box is checked.
• Copy Files to iTunes Music Folder when Adding to Library—This preference causes iTunes to make a copy of audio files that already exist on your computer (such as MP3 files you have downloaded from the Internet), and it places those copies in your iTunes Music folder, just like files you create by importing them from a CD.

If this preference is inactive, iTunes uses a pointer to song files you are adding instead of making a copy of the files; it doesn’t actually place the files in your iTunes Music folder. I recommend that you make this preference active by checking its check box. This way, all your music files will be in the same place, no matter where they came from originally. If you don’t have iTunes make copies when you add songs to your Library and then you delete or move the song files you added, iTunes will lose track of the song and you will experience the “missing song file” problem.