My quick and dirty calculation came up with about 123 CD's worth assuming each CD took up a full 650 megabytes and Apple Lossless consistently reduced the size by half. Realize that some CD's may be a little more or a little less and the size reduction on Apple lossless will be plus or minus by a little also but it would probably average out over the long run. Either way, it's still a good chunk of music.
Apple's marketing numbers are based on 128 kbs. Lossless is likely going to average about 6 times that. So dividing Apple's numbers by 6 is a decent rule of thumb.
I have a total of 741 songs with about 17.4GB of storage still left on the iPod. If each song average 4 minutes or so (some shorter, some much longer), I have about 50 hours of music already.
So I would say you should be looking at probably 80~90 hours of music on your 40GB iPod when using all lossless.
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