I currently convert my MP3s to WMAs so that I can play them in WMP. Usually a 5MB Mp3 get be converted to about 1.4MB using Windows Media Encoder at 70kps.

Is there a better way to compress/listen to music on the Ax without sacrificing too much quality or is the way I am doing it pretty decent? I've seen MVP and such, but are they that much better than WMP to make the switch?

mvp isn't really a good music player. if you're looking for an alternative to WMP though, you could try ogg in gsplayer, mortplayer, betaplayer (which is a much better video player than WMP or MVP).

whether any are better or worse is down to personal taste really, but one thing I would say is that re-encoding from MP3 rather than the original CDs will seriously compromise the quality (using any form of lossless compression more than once will degrade the quality further than going from the original and jsut compressing once). Of course, if you don't own the original CDs, you shouldn't be doing it at all....

I own the original CDs. So when I copy my CDs to my laptop, then convert them using WMEncoder. Is this the best way to get music onto my Ax without wasting too much space? What about Divxencoder?
Will this allow me better quality without having files that are too large?

If all you want are DRM-free WMAs, just use windows media player to rip your CDs. May not be the highest quality rip (compared to EAC, say) but it should do the job rather nicely. If you want another option, I'd check out OGG-Vorbis as suggested.

I use 80Kbps Oggs (from original CDs) using dbPowerAmp converter and whilst commuting using my Seinnheiser PX200 headphones the quality is more than acceptable.

Also, the quality is good enough to use in the car and on my pool room stereo as well - using a cable connected to the inputs.

I have over 1100 songs on my 2.2gb Microdrive doing this.

Rob