If hard drive space is a big issue for you, i.e. you can't afford a larger one or don't have any real capacity, stick with your 256, maybe upgrade to 320 (for instance, I have Coheed and Cambria's new album ripped to lossless and 320 for mp3 player compatability, and the 320 takes up 123mb of space, it would be about 60 to 80ish in 256, lossless comes in at a whopping 434mb). If you have no problem getting a new HD (either internal or external) of about 500GB to 1TB, then go lossless and transcode as you need to. That way, if you lose a cd, or it gets really badly scratched, you'll still have a bit-perfect copy to make a new archive CD.
Having said that, the ideal situation is to have two large hard drives to back up your archive lossless, but this is sometimes cost prohibitive. Bottom line: rip to what sounds good to you unless you want a backup copy.
Edited by Zarathustra19 - 6/20/10 at 11:20am