Ogg Vorbis quality is on a scale of 1 to 10, I think, and 6 is good enough for most people. 3-5 will make OK quality and a smaller size than MP3.
QCD is free, you can get it here:
http://www.quinnware.com/
and download the Vorbis plugin on the same website
Winamp is free but the Vorbis plugin is secret and you're not allowed to download it