Music library software?

Hokay, I just downloaded iTunes, and it gave me a music playlist library setup too…

I want to create my own blended music CD’s for car, home stereo, etc. (And I’m a newbie at this…) My input to my playlist library would be iTunes (of course), but also my own extensive CD album collection, plus Winamp radio.

Output burning would be handled by Nero.

So my question is: Should I just go with the iTunes free library, or is it worth while to buy another one, like MediaMonkey, for $20? Supposedly MediaMonkey has a tight interface with Winamp radio, which I don’t think the iTunes library does…
And if I do get another software library, would I then have to transfer music from the iTunes playlist over to it?

Also what about the format for saving good CD-recordable music in iTunes? Should I use the “Apple Lossless” format, or the AIFF format?