Go to edit, preferences, then import settings, then I believe you can change the import compression from there. Next, right click the song, and the new preference will be there where "convert to apple lossless" once was. Hope this isn't too confusing! Good luck!
For batch converting, I recommend Xrecode2. It's pretty much free, (you have to wait for a timer to count down when it starts up and click a number.) it's very versatile, and can multitask if you have multiple cores on your computer (on todays age, I'd imagine you would..) It's far superior and lightweight. Unless, for some reason, you're set on using iTunes.
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