iTunes/iPod Questions

Just got a 10Gig iPod from MacWarehouse (for $299 nonetheless - it's the discontinued model - no new scroll wheel or remote, but hey...) Anyway, I have used iTunes mainly to stream stations, so I have no experience with iPod syncing, encoding MP3s, playlists, etc. Here are my questions:
1. - In iTunes - the quality of my encoded MP3s from CD sound like excrement! I tried 160, 192, and even 256k rates, and there are still crackles and other such remnants. Any thoughts/suggestions? I'd like to just use iTunes for simplicity sake, but is there another, possibly preferred MPEG encoder program better than iTunes as far as quality goes? I was hoping to upload an extensive part of my CD library to the iPod, but it needs to be of decent quality. I know it can happen - just not sure how.
2. My understanding is that when importing, iTunes automatically puts a 2 second pause between songs. I found the option to "join" tracks so as to keep the album's timing intact, but after doing this I don't have access to the indiviual tracks - the whole album comes up as one song in iTunes and on the iPod, which is fine if I just want to let the album play. But obviously I'd like to have the option to either listen to the record as it was produced or to indivdual tracks. Any help?. Am I not understanding something?
Guess that's it for now. Any help on these issues would be greatly appreciated.
fish
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Thanks
fish