Are you only using them on your PC? Do you ever have any intention of using them on a portable thingy like an iPod?
mp3 are by far the most common but aac is quoted as being better quality and smaller in file size: http://tinyurl.com/4c5yj
AAC is Advanced Audio Codec, they are smaller for the same quality of sound (not for the same bitrate, but they apparently maintain the same quality of sound for lower bitrates). I believe itunes distributes songs in aac format, personally I don't like them as they have security features which can be a barsteward to get round.