but I'm still getting 128kb, and nowhere do I see the words ITunesPlus
You won't see the words in the store labeling a track. iTunes Plus tracks are indicated by the - wait for it - "+" symbol next to the track. Not all tracks are available in iTunes Plus format; most record companies have not allowed Apple to sell the company's content without copy protection. Only EMI and some independent labels have at of this date allowed iTunes Plus for their content.
What is the format most cd's are in? Aif?
Actually they're PCM. AIFF is the format Apple uses in Mac OS X for uncompressed audio.
I read mp3's are a tenth the quality of aif
It depends on the level of compression used for the MP3. This applies to any compression format that discards data to get the level of compression the user sets, including AAC, WMA, and many others.
where's the customer service. Who handles returns and problems.
iTunes Store Customer Service