Use AIFF From apple which is an option in Itunes and keeps all info in its original form including the album artwork, but it does take the maximum amount of space for files, average CD ripped is 600 to 750 mb which is exactly whats on the disc itself as well. By the way the AIFF sounds identical or even better than the original CD or Flac, I have tested this directly several times using the Ipod as a Transport bypassing its own cheap internal DAC and headphone amp.
Again the space could be an issue for some, the new 160 gig ipod is pretty good, I have so far put about 130 to 140 albums in full on it and used around 70 gig... So I would say your going to get somewhere between 300 to 350 albums when full. Otherwise your stuck going to MP3 which a whole album takes up about the space ONE song takes up in full uncompressed AIFF file, meaning around 30 mb to like 60 mb for a whole album in MP3...
Or start to pick and choose songs that are really necessary off each album in AIFF and save some space taking the throwaways off, of course this will take more time than just ripping the whole CD in itunes and just letting it Auto load to your Ipod.
Soundcard has nothing to do with loading your music files to or from the computer for ipod, itunes or otherwise, its only in play when your using the computer as a transport server with digital outs to a DAC, or just outputting the music thru analog RCA or miniplug to a set of speakers.
The ipod just plugs in on its own dock cable thru your USB directly to the motherboard to transfer into the hard drive, the soundcard is not even a part of this chain in anyway, only for re-producing the sound itself already converted back out of the computer, the ipod is not loaded this way however either, its directly loaded thru the USB again not even sending a signal to any quality of soundcard.
You could have NO soundcard and that will not effect the Ipod music file process, but if you play it back off the computer itself thru the headphones or speakers, and not playing it on the ipod then you need a soundcard, which of course the better you have the better it should sound.