i remembered scott posting about the .ogg format a while back-
i ended up finding and downloading the litexmedia audio conversion wizard (2nd from the top).
decent enough software; after playing for a couple hours, i've found that selecting "4.00" on the 1-10 quality out setting leaves room for mp3 quality up to 192kb/s, while letting the ogg's variable bitrate compress where it can; this almost always results in a file between 10-30% smaller than a fixed-rate mp3 with no discernible loss of quality through my sblive-platinum and mdr-v700 headphones. (layman's terms: it sounds good enough.)
after a day and a half's worth of conversion efforts, i've got an extra gig free on the drive now... & i'm nowhere near done. good stuff, i recommend it. just don't go below 4 on the quality setting or you'll start to hear high-end warble.
winamp plays this shiz already. drag-and-drop, just like you always did.
for other platforms, see the vorbis.com link above.