the protection is gone lately, I download from iTunes and never worry about this. I would look at the info after the download however and if it's a VBR, convert it to a CBR, the 2000's have a hard time handling VBR files
I switched to AAC a while back, From everything I read from multiple sources, and maybe someone else can chime in that has more knowledge of this then I, AAC196 = MP3 320 for the most part, so a 256 or 320 AAC will sound much better then any MP3, will your ears notice a difference at 320 mp3 or AAC, probably not so it's a personal choice for ya at this point. The file size will be similar between them also.
If I had a choice, i would use lossless but Pioneer does not allow lossless "AIFF" or WAV files to be exported to tablets wirelessly f you wanted to and if thats coming in the future, I would rather not have to convert everything later on.