eac: exact audio copy. It can be a bit plugin heavy but it works.
I normally use EAC to rip to wave and then feed it into a FLAC encoder or something in megui (typically an mp3 or AAC encoder.
iTunes AAC is not a good example of an AAC encoder although some ipods (not sure about the new ones) do not agree with some of the more advanced AAC profiles.
It is a bit out of date but the audio faqs and threads on the doom9 forums should get you up to speed.
http://forum.doom9.org/forumdisplay.php?f=11
As might the CCCP wiki:
http://www.cccp-project.net/wiki/index.php?title=Video_file
As for audio standards the most common are:
AAC: sometimes stuck in the mp4 container (occasionally with the extension m4a). Nero do a nice freeware encoder, command line only but stuff like megui can act as a frontend with relative ease.
MP3: Short for mpeg 1 - audio layer 3. Somewhat ubiquitous in the audio world and pretty much represents the most compatible but bottom of the line (quality wise) option. To sort this most people just up the bitrate (once 128kbps was the standard but now a lot of people do not touch anything below 192kbps. LAME is the de facto encoder.
FLAC: Free lossless audio codec. Perhaps the most common lossless codec. Sounds exactly like a CD but smaller (normally clocks around 20megs a track). Supported in increasing amounts of standalone players even if only with stuff like rockbox. Just recently a directshow based splitter for the native FLAC container (a lot of the time people used MKV, MP4 or something similar) was made.
Windows media: What MS made, I only suggest it if you have a space limited player with a choice between MP3 and WMA. Often comes from online stores with a nice bit of DRM.
OGG: Not used so much these days but once was jockeying to replace MP3 amongst the audiophiles of the world.
Other standards include MP2 (DPG video and some PAL DVDs the predecessor to MP3 and 90% of the time worse), real (stay away, some standalone players can support it), AC3 (most DVDs, free encoders can leave something to be desired for normal audio, somewhere between MP3 and AAC in terms of quality), DTS (other DVDs and not worth your time really either).