I was disappointed when iTunes 3 arrived sans MPEG-4 support. Perhaps it will turn up in an update soon (didn't Apple just settle a licensing issue regarding MPEG-4?).
In the interim, I wrote Make Mine MPEG-4, an AppleScript applet that automates the ripping of CD tracks to MPEG-4 (using QuickTime 6 Pro). The ripped files are then added to the iTunes library.
As some people have pointed out, iTunes' EQ has no effect on MPEG-4s, but it sounds good at my house!
Mac OS X Hints
http://hints.macworld.com/article.php?story=20020723083452470