Hello Tom,
Yes you can convert CDs to MP3. Paraliminal will work except HoloSync signals. HoloSync signals are low frequency bi-aural beats, which get choped during compression.
As far as paraliminal is concerned its ok to compress these as MP3 and put on iPod. Learning Strategies corporation has CD artwork for iPod, See here
http://www.learningstrategies.com/iPodArtwork.aspI am using HoloSync program for more than 4 months now. HoloSync puts you in a deeper brain wave state - beta > alpha > theta > and down to Delta. In these states brain is very receptive and calm (deep meditative states), so technically it enhances the effectiveness of Paraliminals.
You can also rip the CDs to lossless format e.g. WAV or AIFF and put on iPod/Computer for listening (or backup). In this case HoloSync signal will be preserved!
I have put my paralinimal CDs on my iPod. Though for daily sessions I am using CDs. iPod comes in handy in case when I am out of town or travelling :-) iPod also provides the luxury of listening to any random PL anytime anywhere! So, its good to keep on iPod too :-)
Love n Light,
-Vks