I selected "ACC Encoder-iTunes Plus" for import settings to import cd's. I assumed music purchased from the iTunes Store was mp3 format.Which is it?

I selected "AAC-iTunes Plus" as my import settings when importing CD's to my iTunes library. When I reviewed "get info" on purchased songs from iTunes, it says "Kind: Purchased AAC audio file". All of the purchased songs in my library say this. I assumed all purchased songs were "automatically" imported in mp3 format. Do the import settings I chose also apply to purchased music? Also, what can I do to have my library songs changed to mp3 format?

All songs sold in the iTunes Store are AAC/256.
The import setting affects ripping and conversion.  It has nothing to do with purchases from the iTunes Store.
If you need MP3s, you can convert your AACs by using this procedure:  http://support.apple.com/kb/HT1550  But it would be easier to buy MP3s in the first place, for example from Amazon MP3. 
MP3s can be used in iTunes or almost any other player, program or device.

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