I used to use all kinds of fancy tools but now mostly use iTunes set to rip MP3s at 320Kbps with VBR. I do this for simplicity and an easy life.

The reason for the change was mainly to avoid grumbling from my wife. She's perfectly capable of using other tools but doesn't care for the complexity and didn't see the benefit of using other tools.

With iTunes if she buys a CD she can stick it in the PC, click on import and the album is ripped with all the track information and cover art handled automatically, and the MP3s output to the right location.

I use foobar2000 and Nero AAC encoder @ -q 0.35. I’ve got a 4Gb iPod nano so 320 is way over the top for me.

Windows Media Player does a good job, gets album art, adds metadata, and is pretty flexible with how it names and stores the results.

Sometimes i use the (excellent) Zune software and this works fine, though in the past i found WMP to be slightly better at finding album art. The latest version (4) may be better--it's improved in many other ways.

For rare tagging issues or if the music is not cataloged online, i will twiddle the metadata with Mp3tag.

I rip my CDs with EAC (Exact Audio Copy) because I'm paranoid about getting a good, clean rip with no skips or defects of any kind. In other words, I use EAC for reliability. I don't care much about the speed of the rip or ease of use, though I find EAC easy enough to use (but probably too many options for the non-technically-inclined.)

My reasoning is that ripping a CD is something I do once with each CD, and I want to get it right. Skips in my music make me cringe!

Furthermore, I use a recent version LAME MP3 encoder with high-quality VBR setting. I use MP3 over other codecs because every freakin' device in the world (almost!) can decode MP3. Can't say the same of other codecs like AAC or OGG or WMA, even though they may be good quality and save on space.

See also my answer to Should MP3s be ripped with VBR?.