File size issues - Please help!

Hi
I have itunes 7 with 5,500 songs totalling 85 gig and....
a 30gig Gen5 Ipod.
First of all why on earth are 5500 songs taking up so much space? I can only fit 2500 songs on my ipod then it states it full.
Can someone please help me solve this issue or suggest some things that i need to check.
Can I compress the songs from 85gig to 10gig or so?
Thanks
Michael

Yes, quite simple. Make sure you first go to preference -> Advanced -> Importing and set it to the format you would like to use, say AAC or MP3.
To give you a little bit of an idea, I use 192 kbps MP3 ("Higher Quality") although some portion of my library are other bit rates like 128 and 160 from various sources. I have 7874 "items" that come in at under 35GB. So AAC or MP3 between 128 and 192 kbps should do it for you.
OK so once that is set, all you have to do is go to your library, sort by Kind so we can group all the ones you want to convert together. Select the bunch of them, right click and pick "Convert to XXX" (where xxx will be whatever you picked for importing preference; e.g. Convert to MP3). iTunes will not go through the process of making NEW copies of each track encoded with what you picked in the importing preference. Note that it makes NEW COPIES, so do small chucks at a time if you don't have tons of drive space left. After it finishes a group, you can delete the ones you just converted to free up the drive space (don't forget to empty system trash).
That is all there is to it.
Patrick

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