Automatic transcoding for iPod

I have most of my music library in ALAC which you probably know takes up a lot of space, to much for even an 80GB iPod. So, I would like to continue to automatically sync my iPod with iTunes but have iTunes transcode the lossless files to AAC on-the-fly for the iPod.
After much searching I am aware that iTunes does not have this functionality built in. I don't have the time or resources to manage both a lossless and lossy version of my library so I was wondering if anybody knew if there are any readily available applescripts or automator actions that will do this or even if it's (easily) doable with those two programs.
Thanks for the suggestions!
MacBook Pro 2.4   Mac OS X (10.4.10)  

I have most of my music library in ALAC which you
probably know takes up a lot of space, to much for
even an 80GB iPod. So, I would like to continue to
automatically sync my iPod with iTunes but have
iTunes transcode the lossless files to AAC on-the-fly
for the iPod.
After much searching I am aware that iTunes does not
have this functionality built in. I don't have the
time or resources to manage both a lossless and lossy
version of my library so I was wondering if anybody
knew if there are any readily available applescripts
or automator actions that will do this or even if
it's (easily) doable with those two programs.
Any external scripts etc. would at best result in adding additional copies to your iTunes library. The only utility that is going to sync to your iPod is iTunes itself.
This is a feature I also think Apple should add (I believe WMP has done this for ages).
Ironically I also believe Apple do partially do this already! The iPod Shuffle (original white plastic one and current aluminium one) do not support Apple Lossless at all due to their limited capacity. In this situation iTunes will already automatically transcode to AAC to send to the iPod, see http://docs.info.apple.com/article.html?artnum=300497 . So there is no reason why Apple could not make this available to users with all models of iPod for the same reason.
For example, even though the iPhone supports Apple Lossless (unlike the iPod Shuffle) it also has limited capacity and my music library is far too big to fit on an iPhone in Apple Lossless format).

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