hansschmucker: Didn't read the through the whole thread, but about the "CD quality is only about 64 kbps" comment:
CD's are not compressed. They contain the whole, unaltered, raw data of a song, about 1400kbps. They only way anything can sound better than a CD (which is the source data for both, audio downloads and modern LPs), is by either adding more information (48/96khz or 6/8 channels) or by using DSP effects (or in case of the LP: analog effects like wave smoothing that are just part of the system) and neither applies to music downloads (no shop that I'm aware of uses DSP processing during encoding).
Well, ill just stick my 2 cents here:
Even though CD's are not compressed, they hold digital information and as such the quality of the CD depends on the quality of the sampling or enconding which in the case of audio CD is 44.1 kHz (which means roughly 44 000 samplins per second, if i'm not mistaken on the conversion here).
What happens is sound has the form of a wave when you get it on cd that wave will be composed of tinny little "ladders", wich means we will never get a true soundwave from cd's. The only real and "uncompressed" are those from analogic media (vynil and tapes), that is why still tmost audiophiles prefer vynil instead of cd's.
There is alsothe SACD, that if i'm not mistaken has a higher sampling rate but still it is not a 100% genuine high fidelity copy of the original.