AAC File Format

I am in the process of deciding whether or not to buy an 4GB Mini Ipod. Could someone please tell me the sort of file sizes the AAC format takes up at different bit rates.
I currently have a Sony ATRAC CD player. I have the music on it in sonys own format ATRAC at 64Kbs and I think the quality of it is okay and I can get around 300 tracks on one CD.
What quality would you recomend I encoded tracks at for an Ipod and realistically how many tracks could I hope to get on an 4GB Ipod Mini.

This was originally posted by the incredible Sparky the wUnderdog with help from MacMuse:
As a general principle, you can fit more CD's on your iPod if you encode at lower bitrates (making smaller files), but at the cost of audio quality. Apple Lossless promises to capture all the data on the original CD (thus preserving quality) but coded so the file takes half the space. MP3 and AAC (an implementation of variable bit rate MP4) both eliminate some of the information on the CD in order to compress the digital recording into ever smaller files--the lower the bitrate, the smaller the file, but smaller files mean more information lost and consequent poorer sound quality.
AAC files ripped in iTunes certainly sound better than its MP3's, with audio quality close to the best LAME MP3's at higher bitrates. With the type of music I listen to most often, sound quality declines substantially as bitrates fall below 256kbps, but LAME or AAC @ 256kbps sounds pretty darned good, and at 320kbps LAME alt-preset-insane is amazingly faithful to the original. However, many users claim that with the music they listen to they can't hear the difference between 192 or even 128 kbps files and the original CD source, so they naturally choose lower bitrates to fit more "songs" on their iPods.
CDs take approximately 10MB per minute of music; Apple Lossless takes 5MB/minute; LAME insane takes 2.5MB/min; AAC or MP3 at 256kbps take 2MB/min; and iTunes Store files (AAC@128kbps) take 1MB/min. At these rates, a 20GB iPod (really 18.6GB) can hold anywhere from 30 hours to over 300 hours of music. (iPod marketers express this potential playback capacity as "songs," figuring 4 minutes per song--thus 300 hours at 128kbps = 4500 "songs.") You will need to listen to samples ripped with different bitrates and codecs to determine the optimum tradeoff point for you between quality and quantity. It's worth taking some time to do this at the start as it sure beats reripping everything in your collection 2 or 3 times to get it right later.
So far as convenience goes, nothing beats iTunes's one-step process. To change bitrate as you import from CD, go to the iTunes menu>Preferences, select the Importing tab, choose AAC or MP3 encoder in the "import using" selection box, then choose "Custom" in the "setting" box, and the window permitting bitrate selection will pop up. If you choose iTunes MP3 encoder, at least use VBR (variable bit rate) to maximize the sound quality. (VBR increases sample size as data complexity increases.)
If you would prefer LAME MP3's, fear not, for the easy-to-use CDex ripping software is a free download and requires only one simple extra step to get the files into iTunes for transfer to your iPod. Now if AAC sound quality is comparable to LAME MP3, you might wonder why you should even consider LAME: Because of portability to other devices. At present, hardly anything but iPods can read AAC's or Apple Lossless, but almost everything reads MP3's. So if you plan to burn CD's of your compressed files for playback on your home or car CD player (for instance), it would be wise to choose MP3.
One other consideration specific to the iPod- It has a 32MB cache (If you don't know what a cache is, read the last paragraph of this page: iPod + iPod Mini- Batteries). Keep individual file sizes below 25 MB as the rest of the 32 MB memory holds the iPod's Opperating System. If you choose a compression rate that results in large files (i.e. Lossless), then the cache won't hold very much 'music' and the hard drive will have to spin up frequently to fill it, and that will shorten your battery life somewha

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