I think you should take a step back here. The quality of your mp3s isn't necessarily the problem here, although it could be.
What type of ipod do you have? What bitrate and format did you import your cds to in iTunes?
Do you hear the crackling sounds when you play the same track from your computer with the HD212s plugged into it? If so, it might be the quality of the sound files, or it could be the headphones themselves. Try the headphones plugged into as many different sources as you can. If they sound fine everywhere else except plugged into the iPod, then there is probably an issue between the iPod and the headphones. It could be EQ settings, or it could be something else.
Early generation iPods often produce audible hiss with certain headphones. This would be especially noticeable between tracks or during quiet portions of the music you are listening to. If this is the case you might simply have to look for a pair of headphones that is a better match for your source.
You could also try re-importing the songs with different bit rates through iTunes, or other tools to see if there is a difference. One thing to keep in mind is that as the bit rate goes up, the amount of storage space needed for your files goes up as well. Lossless file formats typically are compressed 50%-60% of the size of the original file, which means that you will need 250-400 Megabytes of space on your iPod to store one CD.
Lossy files such as mp3 files can be compressed much more, so that one CD only takes up 50-60 MB. The trade off, is that the sound quality can be lower than it would be with lossless files.
Depending on your ears and the quality of your electronics, you might not even be able to tell the difference at or above certain bit rates. Jumping directly to lossless files may be a huge waste of disk space and time for you, if you could be satisfied with a high bit rate mp3 file. This is especially true if you are only using the files for portable music listening.
In my opinion, and based on what I hear, there shouldn't be a need for lossless files on an iPod with Sennheiser HD212s. I've encoded thousands of songs, and experimented with various bit rates and compression formats. Even at extremely low bit rates, I've never heard static or crackling added by the encoding process. At low bit rates I hear sound that is flat (no loud and soft parts) and congested (not easy to pick out various instruments, or parts). I also hear compression artifacts at low bitrates, such as cymbals sounding squishy or spitty, or such as other instruments sounding unnatural. Crackling is usually caused by something other than bit rate. So going down the path of super high bit rate, or lossless is probably not going to solve this for you.
You really need to troubleshoot this, and try to isolate the problem. If you want to try higher bit rate music, feel free to do so, but do it in a controlled manner. Test a few tracks at a time. There is no need to re-rip or re-acquire your entire collection just yet.
Hope this helps!
George
