I can't contribute to the direction this thread is taking since I don't use either service. I can comment on your original question:
Originally Posted by matt_90048
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So I guess to be more specific, my question is whether transcoding from 384kbit/s free format to 320 mp3 format going to produce significantly lower quality of music as compared to ripping a CD directly into 320 mp3 format?
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From the Wiki:
Compression artifacts are cumulative, therefore transcoding between lossy codecs causes a progressive loss of quality with each successive generation. For this reason, it is generally discouraged unless unavoidable. For instance, if an individual owns a digital audio player that does not support a particular format (e.g., Apple iPod and Ogg Vorbis), then the only way for the owner to use content encoded in that format is to transcode it to a supported format. It is better to retain a copy in a lossless format (such as TTA, FLAC or WavPack), and then encode directly from the lossless source file to the lossy formats required.
http://en.wikipedia.org/wiki/Transcoding
My understanding is that better to rip from CD directly rather than transcode from a higher to a lower bitrate.