I'm sure it's not as cheap as internal drives, but the external USB drive would be handy for that- and they are getting pretty reasonable.
For best quality I guess lossless is the only way to go, although I've never done it. I still pull out the actual CD and load it in the player when I want to listen to it on the M80s. Everywhere else (car, portable-player, computer) my 128kbps WMAs fit the bill, although I've been running those for about 7 years or so. 128 WMA/MP3 is not good enough for serious listening on your Axioms. But on other smaller systems it doesn't seem to matter that much. If I were doing it over today, I would highly consider something lossless or a higher bitrate (256 or higher).
Bottom line is you've probably got to find 2 or 3 test songs you like and sample them in just about every format available- then listen, listen, and listen some more. Find what sounds best to you and if it is doable, go for it.
