Previously I MP3'd everything. This involved ripping every CD (very time consuming if only because you must insert the CD) then MP3ing everything with LAME/RazerLame (leave overnight).
I'm not such an audiophile that I can't handle a well compressed MP3. I'm happy enough with MP3 (although if I was doing it again I'd probably work toward using FLAC lossless).
But I am particularly in tune to hearing audio defects. I hear them in MP3s but I am able to ignore them. I also hear them in The Simpsons and Futurama and various other DVDs. Small and random glitches in the audio that no-one seems to hear but me, that I believe are related to converting the audio from NTSC/Film to PAL.
What I'm particularly in tune to is hisses. I can hear the hiss the TV makes when you turn it on. The hiss the CRT monitor makes. It's like a truck going past. It may be my tinitus that makes me listen harder for hiss. Who knows.
So you average soundcard (like the inbuilt cards on most motherboards) drive me insane with their hiss. My video capture card (Winfast TV2000 XP) FM channel isn't much better.
I've gone with an MAudio Audiophile 2496 and it's lovely. It still hisses (partly due to me putting it through a cheap mixing desk) but it's much better than any Creative brand or inbuilt that I've heard.
Unfortunately it's $400. I have a reason for having it (recording my band) that made it worth the money. It's probably not worth it for your stereo set up...