Use a combination of
Exact Audio Copy (EAC) and
LAME 3.90.3. EAC provides the best ripping quality at the expense of speed; LAME is the defacto open source standard for mp3 encoding and is arguably the best quality mp3 encoder (and most configurable), opensource or not.
To setup -
Extract EAC and LAME into a directory of your choosing. Let EAC run through the configuration wizard and choose the detect features on my drive option for best results. When EAC is searching for the lame binary, you can hit cancel and find the location where you extracted it to. I recommend leaving the option "use r3mix settings" checked on for the moment. Any email address is required to access CDDB databases (where you can query the names and tracks of CDs you are ripping). We can choose the "keep EAC easy" option for now.
There are a few more things to configure to get the best results out of EAC and LAME> For the best results there need to be a few configuration options.
Filenames

Hit F9 to bring up the EAC options menu. Go to the Filename tab and find the "Naming Scheme" text box. This is where you choose how files are to be named on your HD. Personally I keep albums in their own folders so I do a naming scheme of tracknumber - artist - trackname, denoted by %N - %A -%T. Other options are available and this can be setup to your choosing.

While we are still in the EAC options menu hit the tools tab and choose the option circled below. If this is not checked, CD ripping and encoding will be done seperately meaning that no compression will take place while CD ripping is happing and no CD ripping will take place while compression is going on. Most users can leave the simultaenous threads option at 1. If you have a dual CPU system you can try upping the value.
Compression Options

Hit F11 to bring up Compression Options. Click on the External Compressor tab. Make sure the Parameter passing scheme is set to LAME. The path for the compressing program should be right. Now there should be a big string in Additional command line options. Right now it is set to options from a defunct site. HydrogenAudio.org a leading site on compression and sound quality in general recommends these settings in place of the r3mix settings.
-- alt-preset standard (~190 kbit/s average)
-- alt-preset fast standard
--alt-preset extreme (~250 kbit/s average)
--alt-preset fast extreme
--alt-preset insane (320 kbit/s CBR)
--alt-preset (cbr) (cbr is an optional keyword. Bitrate is a number. Remove both ( ) and < > in the actual command line so it looks like --alt-preset cbr 192 or --alt preset 256 or some other value.
The fast modes are the same kbit rating as the normal ones except they may introduce slight anomalies.
A lot of people may not be aware that there are two ways to encode mp3s, constant bitrate (CBR) or variable bit rate (VBR). Mp3s are divided into frames, which is a unit of time. Each frame in a CBR mp3 has the same number of bits, so for a 192 kb/s mp3, the series of frames that constitute 1 second of audio will each be the same size and will sum up to 192 kb/s.
VBR is the more sophisticated way to encode mp3s. VBR allocates the appropriate number of bits to a frame in order to encode a frame. For example a simple frame like a lead in for a song that is very quiet can be encoded with very few bits and VBR takes this into account. In a more complex passage, 192 kb/s may not be enough so 320 kb/s is used for that particular frame. In this way, encodings are higher quality because the mp3 encoder tries to be smart about what data is being encoded and acts accordingly. All the music I rip is in VBR.
For more detailed discussions on encoding settings and transparency when compared to CDs visit these two threads -
http://www.hydrogenaudio.org/index.php?showtopic=203&
http://www.hydrogenaudio.org/index.php?s=&act=ST&f=16&t=7783
Back to EAC/LAME, the size of the mp3s you wish to encode will depend on the application. For those with a lot of HD space, alt-preset extreme may be feasible but for people with flash memory players, that may be too much space.
This would be a good time to insert an audio CD into the CDROM drive. Alt-G will retrieve CD information from a CDDB database.

Highlight the songs you want ripped and encoded and hit Shift-F5 to start the ripping process. If you have a badly scratched CD or you are adamant that you need a perfect rip, you can perform a test before a copy. EAC will compare the two tracks and make sure they are the same. This can be accomplished with Shift-F6. All the ripping options can be found under the Action menu on the main page of EAC.
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