Niffleman, there is a trade-off to be made which you need to consider before you rush into ripping at lossless or even high bitrate. First a few numbers.
A standard CD will be in the region of 500MB in size. At that size you could get 16 CD's onto an 8GB Nano. If you were to rip these to Apple Lossless then you would reduce the size of each CD to around 300MB. So, you would now be up to around 25 CD's on your iPod. Neither of these numbers seem too appealing I expect.
The reason MP3 and AAC are so popular is that they compress music files to a far greater extent than lossless formats like Apple Lossless or FLAC. They do this by discarding much of the high & low frequency information that is considered to make little difference to the average listeners overall perception of the music.
So, if you use a bitrate (measure of compression, higher bitrate less stuff discarded) of 320 kbps MP3 for example you would compress your original 500MB down to around 80Mb so now you are up to around 100 CD's. If you were to use AAC at 128 kbps you'd get down a little further, say to 50MB so you'd be up to 160 CD's.
The reason many people use MP3 rather than AAC is that it is considered to be a more 'universal' format. Whether that is true in real terms is another matter. On the other side there is a body of opinion that AAC files are better sounding than MP3 files at any given bitrate. I haven't checked that myself.
So, first off you would be far better going for a compressed (lossy) format given the fact you only have 8GB to play with unless you want to be changing the music on your iPod on a very regular basis. To decide what bitrate you should use I would suggest you try ripping, and I would probably stick with AAC in your case, to a variety of different bit rates to compare. Start with the highest (320), and keep notching it down until you can hear the difference. Once you've found that bitrate notch it back up one and you're done.
I would try this experiment through headphones and if you can through your hi-fi to ensure that you've got a good bitrate for both.
Good luck!
Have a good plan, Execute it violently, Do it today.
FLAC: One codec to rule them all.