OJNeg - iTunes does not automatically apply any EQ. You can turn it on if you wish, but the default is a pure pass through.
Camjon - To get the best quality from your CD use a lossless format - ALAC is good. But if you want to use MP3s for portable and other storage concerns, I recommend setting a custom MP3 setting of 320 kbps, 44.1 kHz sample rate, and "normal" stereo mode. This will be among the best possible compressed sound formats from your CD originals. Most people cannot reliably tell the difference when using those settings versus lossless.
There are better players for mac (I prefer Fidelia, but there are many), but the differences are more down to memory usage and to my ears a bit more detail and clarity - I honestly use iTunes for 80% of my listening despite have better programs available, just for the convenience, and the sound quality differences are so slight as to be negligible for most source material and most of my listening circumstances.
I do leave the iTunes EQ turned off, and I do run the iTunes ouput through AudioHijack pro, to use my crossfeed plugins, and if I wish to use EQ, I use a parametric eq plugin from that. But this is for my personal preferences only and by no means necessary.