It all starts with the sad fact that I'm a perfectionist idiot about audio quality, so I still buy CDs and rip them myself using Apple's lossless codec -- I can't quite bring myself to (usually) pay more on iTunes for a lower quality file. The lossless codec achieves about 50% compression, yielding files about three times larger than the iTunes Plus 256-kbps AAC setting that most people rip in and the iTunes Store uses. It is, however, a complete bit-for-bit copy of the original CD.
Note that its not so much that I can hear the difference; more that I don't drive myself mad wondering if I can. I have occasionally, but admittedly not often, picked up the odd rough-sounding cymbal splash in iTunes Plus files when listening on decent headphones; but I am by no means one of those audiophiles who believes in spending thousands on speaker cables and $2000 on a power cord that defies the laws of physics. Still, though, by using only Apple lossless audio codec (ALAC), I know that I can avoid even thinking about sound quality issues. That's the appeal for me.
Even if you're unconvinced by my reasoning here (and I admit it has more to do with my own eccentricities than strict logic), there's another reason to prefer ALAC format ripping -- down the road, if I have to change to alternative music formats, I won't need to rip the CDs again. I can turn the ALAC files back into pure WAV format and then transform them into any other format without any further loss of quality. I do this occasionally when I want to put more music on the USB stick that I keep plugged into my car radio, which will play mp3 and WMA files but not AAC. In contrast, running a lossy encoded format file like AAC through the encoding process to another one like mp3 results in a really muddy, horrible sounding file.
However, whilst ALAC is fine for use on my Mac where disk space is cheap and for streaming around my house's Ethernet network where bandwidth is plentiful, it's not really much use for syncing to my iPhone, because it's too darn big. I'd prefer to compromise quality a little on the iPhone in order to fit a decent amount music in and because I mostly listen to the iPhone when walking the dogs or in my noisy day-job office, neither of which demand the highest fidelity.
Sadly, iTunes really doesn't want to work with me. It has the "convert higher bitrates" option, which is teasingly close to what I want, but it's irritatingly locked to only output 128 kbit/sec AAC. That really is too low -- I can definitely hear annoying compression artifacts. So, for a long time, I've been maintaining two iTunes libraries. One is full of ALAC and I use it for playback in the house; the other is full of AAC and I use it to sync my iPhone with. Hence, when I rip a CD, I have to rip it twice (or do a second pass of conversion from the ALAC files to AAC), and if any track names, album art, or other metadata need adjusting, I need to adjust it twice. This is tedious and annoying.
Enter iTunes Match, which might just solve this problem for me at a stroke. I'm hoping it will allow me to rip once as an ALAC file, and upload that converted file to iCloud. Apple says that:
[A]ll the music iTunes matches plays back at 256-Kbps iTunes Plus quality -- even if your original copy was of lower quality.
which implies to me that even ALAC files going in come out at the lower quality 256 kbit/sec setting. I wouldn't even need to cable my iPhone to iTunes to get new music any more, let alone rip CDs twice or juggle multiple iTunes libraries. For $25 a year, I'm in, although it seems that we'll be waiting until 2012 to get iTunes Match in the UK.
Although this problem is fairly obscure, I have seen others people post about this problem from time to time (one, two, and many of the comments below). I hope this post will reach those folk and prompt them to look at this little side-effect of iTunes Match more closely.