To add to Venny's comment
Most music CD's use the .wav formate which holds every bit of data possible from the recording. It's hard to get more than 20 songs on a CD with this format.
Ripping a CD is a way of reducing the size of the file without sacrificing a lot of quality.
If the speakers you play your music on cost less than $60 apiece, you probably couldn't detect a difference.
The big advantage to ripping music from .wav format to .mp3 is storage and fast Internet transmission. Instead of 20 songs on a CD, you can get 200-300 songs. The drawback is that these CD's can't be read by a car's stereo system.
So if you have 20 mp3's that you want to play on the car CD player, you rip them back to .wav and burn them to CD. I have heard that some newer model cars will play mp3's. I haven't seen one yet.