In a prior thread, I mentioned that I was using a scripted way of maintaining lossless (FLAC) files in one file tree, while simultaneously having a mirror image of that directory tree populated with MP3 files.
This way I keep the SlimServer software pointed at the FLAC directory tree, so that I get lossless with the Squeezebox. I then point iTunes to the MP3 files, and use those files on the iPod, since they're considerably smaller.
My method is to rip CD's into FLAC files, and then have an automated process that nightly checks for all new FLAC files, and converts them into MP3 files into the corresponding MP3 directory. The original FLAC files, of course, are still there.
I've released my program into the public domain. I've only tested it in Linux, but I imagine it should be adaptable to other Unix-like operating systems (such as Mac OS X) and Windows with relatively minor modifications.
Please note that there are a couple ancillary programs that are required for this to work. They're listed on the website where you can get my program, and they do the legwork of reading the FLAC files and their metadata, encoding MP3 files, and modifying the MP3 tags.
The website where you can get them is here
Let me know if you have any suggestions or problems. I hope this helps other people who are in the same predicament of needing both lossless and lossy files for different purposes.