Well, there are a couple options, and no real silver bullet.
Apple Lossless gives you true CD quality audio. All it does is compress the audio ripped from the CD, and doesn't do anything that throws away data. It is the largest (at about 300MB/CD), but you can't get any better than this in terms of quality. This can only really be played in iTunes, on iPods, Apple TV, and so on. Nobody outside of Apple supports the codec as of yet.
AAC and MP3 are both 'lossy' formats, in that they throw away data that is believed that the human ear can't hear. So, bitrate becomes important here. AAC tends to get just as good quality at one step 'down' from what MP3 needs (so if you have a 160Kbps MP3, the 128Kbps AAC should sound similar). The catch is that AAC doesn't play on all the devices MP3s can. So if you are mostly playing it back using iTunes and an iPod, AAC is just fine, but if you have some exotic devices that don't support AAC (.m4a/.mp4) audio, then you should stick with MP3. As for bitrate, I prefer to go no lower than 160Kbps AAC for my own rips, and for classical, I like to stay above 192Kbps AAC. For my own purposes 256 and 320Kbps MP3/AAC sound the same to me.
Unfortunately, the best advice I can give is rip a single track using the codec you want to use, with a couple different bitrates, and listen. Pick the one that hits that sweet spot for you and what you listen to.