If your wife has 500 songs on a CD they will NOT be at the same quality as the 'original' source CDs. Compression = loss of quality. You can't 'squash' something without losing quality at the same time, whether it's jpegs or mp3's
The lower the bitrate at which you convert a CD to mp3 format, the lower the quality will be, but at the same time, you'll get more tracks on a CD.
Not that the current 'ipod generation' give a monkeys about quality...style being everything nowadays....but most people I think rip CD's at 128 Kbps.
I think to get near to CD quality though you'd need at least 192kbps. 500 songs on a CD sounds like around 64kbps to me!!