Actually, this is an incredibly fresh library that was created with iTunes 9.0.1 - in preparation for my Nano, I created two brand new libraries, one for my losslessly imported CDs and one with 128 kbps AAC versions of the CDs and all my purchased music. I moved the music into my library using the "Automatically add to library" folder that's a feature of iTunes 9. In case it matters, the library that I've been syncing is located in /Users/Shared/iTunes Music/, rather than the default inside my home folder.
The only type of material that I've synced is music files, podcasts, and iTunes U audio recordings. They are mostly 128 kbps AAC files, with a smattering of 160 kbps MP3s and 256 kps AACs as well.