I followed audiophile newsgroups for years and 90% of them had no idea what they could actually hear, only what they BELIEVED they could hear. I'd like to see you prove in a double blind test that you can actually (as in statistically better than guessing) tell the difference between a 128kbps AAC song and a 256kpbs one, let alone between a CD and a 24-/bit/96kHz stereo SACD. I'd be willing to bet $$$ that you'd fail at both (although it is possible to win at 128 versus 256). Most audiophiles are shocked to find they cannot tell any differences of any bragging claims they make what-so-ever once it's a double-blind test. Most then go on to state how unreliable double-blind scientific testing is which is akin to saying that basic arithmetic is inaccurate.
I'm afraid a properly mastered 16-bit normal audio CD is well beyond the hearing capability of most normal human beings, seeing as you'd have to crank it up to have peaks over 96dB to even begin to test the dynamic range limitations and most music has FAR FAR less than that much dynamic range to begin with (most less than the LP's capability with pop music) and any human that claims he can hear higher frequencies than 22kHz is an out-and-out liar. Any human that claims higher sampling frequencies somehow record more audio information is ignorant of digital sampling. Brick-Wall filtering hasn't been a technical problem for over 20 years so don't bring that up (oversampling, 1-bit DACS, etc. all came out in the '80s).
There IS some great recording benefits to 24-bit-/96kHz, but it's all in the headroom department (to maximize dynamic range without worrying about things like clipping in live recording). Mastering down to 16/44.1 is just fine and as I said, most recordings do not even REMOTELY take advantage of the capabilities of the Compact Disc format as it is. Arguments could be made for more channels (I have some nice DTS recordings in 4 and 5 channels), but that has little to do with the iTunes store or most recordings in general as they are simply not offered as such. As for AAC, 256kbps is indistinguishable from lossless in all the double blind testing I've seen and only becomes a problem in succeeding generations if you tried to convert it to something else and then back again for some reason.
What's wrong with iPods as music players? They support MP3, AAC and Apple Lossless. As for FLAC, it's nice that it's an open standard but Apple Lossless is ALSO 100% lossless (easily proven by playing a DTS music CD over my AppleTV unit with it as it would not decode if even one bit were out of place). Because Apple Lossless is lossless, you can always convert to WAV or FLAC in the future if there some need to do so. In other words, these are not reasons to avoid iPods. But the "care about song quality" thing is BS for the reasons outlined above. Lossless is not necessary to achieve virtual lossless to the human ear which simply cannot hear the differences claimed. If it could, passing double blind tests versus something like 256kbps AAC would be easy to do.
