There are several factors to consider when ripping ones collection to digital audio. First is the size of the file. If you have limited hard drive space or you have a digital audio player with a small capacity, then choose a lower bit rate. 128Kbps MP3's are compressed by a factor of about 10. You can store 9-10 albums ripped at 128 on a single CD-R. Second is sound quality. Lossless compression is great if you have unlimited storage space. There are several options. Apple recently jumped on the lossless bandwagon with its own lossless codec. There are several others, including FLAC and Monkey's Audio. Lossless codecs shrink the file size about in half. Although you have no loss in sound quality, most players do not support lossless codecs. MP3 is the most widely supported codec so I would probably use it. Especially since you are ripping your collection for the first time. You should also be aware that there are many different MP3 encoders out there. Some sound great and some sound terrible. I suggest using the LAME MP3 encoder. I rip my files at 192 or at variable bit rate using the --alt-preset standard tag. (if you don't know what that means, follow the links below...
If you have a mac, use the iTunes to LAME encoder whick can be found HERE.
If you use windows, use Exact Audio Copy to rip your files and the LAME encoder plugin to convert to MP3.
They can be found HERE, and HERE.
There is a ton of good encoding information at Hydrogen Audio.