Apples ALAC, is likely not MPEG-4 Audio Lossless Coding (still not locked until at least late this year), and Ogg obviously isn't an option on the iPod.
Hydrogen is going to tell you to test both and see which you prefer. AAC and MP3 are going to have slightly different characteristics (in how they compress), so a test is best.
But if you want an answer... LAME is the only MP3 encoder to really compete with QT/iTunes AAC. Assuming the are roughly "equivalent" in quality, I give it to AAC for speed. Encoding is MUCH quicker if you use iTunes than LAME alt presets.
I'd stay away from the iTunes MP3 encoder is you're serious about sound and using high bitrates.
Also if as suggested, you encode to ALAC on your laptop and then encode off them to AAC for your iPod (if you want to save space or have an older non-lossless supported model), you have a nice work flow. There are similar options for MP3/FLAC on the PC side, but not at this point for the Mac (mentioned since we don't know your OS), or for ALAC.
If compatibility is a issue for sharing, or for DVD player/car stereo/etc. usage, MP3 should be the way to go.
I'd say at this point (and these options), it's about the non-sound issues.
I use ALAC for a good chunk of my home listening, and 224 AAC for iPod (1st gen) use.
EDIT: Ahhh held off sending. Although the MP3 encoder is iTunes (so don't use comparison if you're considering LAME), and 256 isn't tested,
this page is good to hear what you're missing at the different AAC bitrates. It's part of the reason I settled on 224.