AAC 128kbps vs. MP3

Better for what?

The bit rate of MP3s can vary. It depenfs upon how they were encoded.

iTunes can covert them to APple ACC lossless format ofwith varying degress of compression/bitrate.

128 kbps is a good comprimise of size and quality. iTunes allow you to compress to greater of less than 128

AAC is generally better than equivalent bit rate MP3. At 128 Kbps AAC, most of the "killer samples" at hydrogenaudio.org are transparent to me. Not so with 160 Kbps LAME MP3 and even 192 Kbps.

That said, you should avoid converting from lossy to lossy format, especially when going from MP3 to lower bit rate (higher would make no sense) MP3, because that will greatly magnify the artifacts. Here again AAC is superior in that it's degraded less by transcoding, either from AAC->AAC or MP3->AAC. Converting to lossy formats is really meant to start with lossless audio, and since your stuff is all MP3, well, I wouldn't bother unless it's 256 Kbps or above. From what little I've seen, Youtube is all 96 Kbps MP3 anyway; what are your files?

Does Apple even support WMA? I don't think so, and if not, then you'll have to convert if you want to play on Apple devices.

As for MP3, unless your files are encoded at a considerably higher bitrate than your target AAC bitrate, I would not recommend it. You have to balance the space savings against the reduced quality that occurs when you transcode. You can convert a few files and ABX them against the originals in a program like foobar2000 on the PC to help determine if the quality is acceptable.

iTunes can covert them to APple ACC lossless format

AAC is not lossless. Just to avoid any potential confusion.

Regards.

From iTunes Help:

Windows Media Audio; a digital audio file format created by Microsoft. iTunes can convert WMA files to other formats.