What breez said is pretty much right-on. Go get EAC (I use v0.95 Prebeta 5 because Prebeta 11 did not work right on my system or wasn't stable) and LAME 390.3 and go to town. Use one of the following presets:
--alt-preset standard (VBR files averaging ~190 kbit/s; excellent quality)
--alt-preset extreme (VBR files averaging ~250 kbit/s; slightly larger file size than "standard" but also slightly higher quality)
--alt-preset insane (CBR files @ 320 kbit/s; largest MP3 file size of all, but also the highest possible quality)
I'd recommend trying all 3 before you encode your entire collection. Pick 1 of your favorite albums and rip it 3 seperate times, using each of the presets above. Listen carefully to a few songs from the album and compare them with the identical songs ripped at another bitrate. Chances are you won't be able to tell the difference between any of them--if you do, either you have extremely good equipment or it's a psychological thing (your mind telling you that the files ripped @ 320
have to sound better).
A lot of people can't tell the difference between a high quality MP3 and the actual CD track...so for the sake of file size and space savings, you should find the bitrate where the music stops sounding any better and you can no longer tell a difference, and rip your collection with those settings.
Personally, I ripped everything @ 320 kbit/s using the "insane" preset. I can't tell a difference from the "extreme" preset, but I have tons of hard drive space and I figured if I ever get much better audio gear than I have now, I might be glad I ripped at the higher bitrate.