I'm completely out of my element and I'm looking for suggestions. I want to rip all my wife's CD's to her system or to our home server but I'm not really sure which codec/format to convert the files ...

I've used EAC to do this. Instead of ripping individual tracks, tell it you want to "Copy Image & CUE Sheet." That will make a single WAV file of the entire CD, then you can convert to MP3 from that.