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Is it possible / ok to rip from CDs directly to MP3, or should I rip to WAV files?
There certainly *are* programs that rip to MP3 files. Musicmatch Jukebox and CDEX are two well known examples. MP3 Wizard is another.
It is true that sometimes problems result from trying to encode on the fly, mainly because the digital audio extraction from the CD ROM drive is to some extent a time-sensitive task. If it works, fine. If you have doubts as to whether it's working properly, then try ripping to WAV files first and then encoding afterwards. Ripping to WAV files is the simplest, since it involves very little manipulation of the basic PCM data ripped from the CD.