Whats a CD? Only joking, I have not used the CD ripping feature as I only have MP3 files on my SD cards. However I would personally use the highest setting available to retain quality. You will find however this will mean a much larger file being stored on your HDD, which results in potentially less CD's on your HDD library before it gets full.
However I would advise to rip CD's on your computer and save the MP3 files to a much larger SD Card for example I got a 128GB SD card the other day for around £40+ This means I can move it between cars without having to wipe the old cars HDD and re-rip CD's to the new cars HDD.