There are a few strategies you could use:

1. Two libraries.  One for SB one for iTunes. I use dbPoweramp for
this.  It rips, tags, finds cover art, and converts a whole bunch of
different file formats as well as adding replay gain during ripping.  
I first ripped everything in FLAC then converted to a different
location in AAC.
The drawback is, keeping the two synced.  After the initial rip and
conversion you will need to rip twice - once for each file type.

2. Foobar and a couple other programs are capable of converting on the
fly to your ipod or phone.  The only "drawback" here is not using
iTunes. 

Flac is one of the best formats for listening via your Squeezebox.  As
for  other devices, listening environment and storage size are two
considerations you have had to make.  
Because most of my listening is in the car and my device won't hold all
my music uncompressed the music on my device is compressed.


-- 
tedfroop

"Good judgement is the result of experience ... Experience is the result
of bad judgement." 

--  Fred Brooks
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