I'd have to upload all the music again though to get the larger file size wouldn't I?
If you care about sound quality, yes.
For me, fully uncompressed songs (such as WAV files) are not suitable for the iPod as it's a waste of space.
Apple Lossless will give excellent sound quality, but at a file size that is much larger than mp3 or aac (but far smaller then say WAV), so the trade off here is not as many songs will fit on your iPod.
You should probably start by encoding a piece of music you are familiar with, in either mp3 or aac at something like 192kbps, listen to it, then try again at different bit rates, both lower and higher, to see if you can hear a difference in sound quality.
If you can’t hear the difference in sound quality between various bitrates, then the lower one will suffice, and you can store more songs on your iPod. Try this in both encoding formats. You could encode the same song several times in iTunes under a slightly different name (just edit the song in iTunes and add the bitrate after the song title), transfer these songs to your iPod and do some comparative listening. Then you can make an informed decision about which format/bitrate is best for you.
Yes it’s time consuming, but much better to rip your cds at decent sound quality now, rather than decide much later that you are not satisfied, and have to rip them again.
And incidentally, a song of the same length, encoded at the same bitrate, gives an almost identical file size whether it be encoded in aac or mp3.
Where the space saving issue comes in is because many people say that if you encode a song at 128kbps in aac format, then the sound quality is as good as the same song encoded at 160 or 192kbps in mp3 format, therefor with aac you can lower the bitrate, get the same (or better ) quality, and store more songs on your iPod.
It's very subjective and you shouldn't let anyone tell you what to use.
Let your ears be your guide.
See this for checking which iPod you have:
http://support.apple.com/kb/HT1353