You have a longterm project ahead of you! If I could make a suggestion... don't wait until later to embed album covers in your mp3/flac files (assuming you will wish to at some point) - it may take some extra time, but at least what you've already ripped won't remain in limbo as a 'work in progress' that isn't suitable for permanent backup in a fireproof safe. If you rip and embed all at once, at least you can feel secure that these are finished products that you can do permanent backups of periodically... and believe me, with ALL the work that's involved, you will NOT want to have to do it all over again!!!
You know how you can walk up to your cd collection not knowing what you wanna listen to, see an album cover and think, "ya, that's the one"? Well, that's the benefit of embedding jpg album covers into your mp3/flac files... and you can scroll through your albums visually. It's well worth the trouble!
Generally... if you want to use these on iPods and have the most flexibility in terms of players etc, mp3 is a solid bet. Might as well rip at the best mp3 bitrate of 320kb/s at 'constant' (not variable) bitrate. For most of the public, that is more than sufficient. If you really want the best, even though audibly it's hard to detect much of a difference, than of course rip in flac (or ape, perhaps). But Windows Media Player and others will/may not be able to play these... you'd need a less mainstream player. And it'll take longer to rip flac, because the file sizes are much greater.
