mp3
Had thought about this myself for a while and have come to the copnclusion that an Ipod or machine of similar capacity ( I think creative do a 30 gigabyte one for a lot less) would be the most versatile machine.
But not playing MP3 because the quality of MP3 been amplified though a large system is quite noticably poor. It would be akin to the difference between am and fm.
I've checked this with a friend of mine's and the difference is quite discernible.
My advice to you would be to download cd's, which you can do from the software provided with the ipodiething, as a full capacity cd, ie don't compress the file as an mp3 but download all 700 mb per album (it will be a fair bit less per album as most cds don't use the full 70 minutes. This will mean, you will have the cd quality on you ipodithingie which I think, if my maths are right, wil mean you should be able to fit about 43 x 700 mb albums on to you Ipodieting which really means you should be able to get about 50 cds packed on to one.
I think I'm right in wot I say! Can anybody verify!