Without knowing how big your iTunes library or your HDD are, I can tell you AIFF is at the top of the heap, uncompressed, bit-accurate file copies, but there are alternatives that, for all intents and purposes, are just as good.
A while back I've started re-encoding the music I own on CDs, to Apple lossless, just for archival purposes, so I can get rid of the physical discs, and because HDDs are so inexpensive now. Originally I had encoded most of them with AAC at 192kbps, back when computers came with 60 or 80 GB hard drives.
Before deciding to do this, I did some extensive storage implication- as well as sound quality- testing. AAC-192 (which I had been using before then) vs AAC-320
both without VBR, vs Apple lossless.
First the storage: a three minute song at AAC-192 came in at an average of 4.2MB; at AAC-320 the same three minute song would use up about 6.9MB while Apple lossless would chew up 15.8MB. I deliberately didn't use VBR, to see what was the max sound quality, it could get from those set bit rates of 192 and 320.
The sound quality difference I heard between the 192 and 320 bit rates, was clearly audible on good sound equipment, or through my AKG 701 reference headphones. Comparing that AAC320 against Apple lossless, was less of a pronounced difference, but audible nevertheless, a more open sound, with better definition in the high end. With a good separate DA converter, which I'm in the process of getting, I expect the difference to be even more pronounced. (I have auditioned the HRT music streamer ll+, as well as the music streamer HD in my local audio store, and was extremely impressed; so much so, that I started this massive project of re-encoding all my CDs)
To future proof all the music I had on CD, I've decided on Apple lossless; if better audio equipment comes along, without owning the CDs anymore, I'll still have all the information that was on them. The bit rate on Apple lossless seemed to vary from the low 600s kbps to the high 900s kbps, and in my case, an average of four CDs take up 1GB of storage.
If you're not going to expect the best possible sound quality from your music at this time, it may seem overkill to waste so much storage on your music library, but you may change your mind in a few years and HDD storage is so inexpensive nowadays, that it seems like a bit of future-proofing.
If you have the means to, my recommendation to you would be to, at a minimum, use AAC-320 with or without VBR. If you have enough storage capacity for your music library, and want the best out of your CDs, go for Apple lossless.
For any music you buy from the iTunes store, you are for now still limited to 256kbps of course, but there have been some rumors in the past that Apple was working on High Res files, at a premium, of course. And there are of course High Res audiophile music download services, such as HDtracks and the like available online, if that's your cup of tea.
You've said, you want the best sound quality; you may want to check out these links:
http://highresolutiontechnologies.com/music-streamer-ii-plus
http://www.audioquest.com/usb_digital_analog_converter/dragonfly-dac
As I mentioned above, I've auditioned these, and it's an eye-opener, there's no going back! Good Luck.
