I tried it yesterday. I converted a classical CD to MP3 first using Microsoft's Windows Media Player. Converting the 1 CD created massive files that when put on my Reader nearly used up all the available space (over 100 MB). I then tried converting using Nero. This time, when I used Nero's MP3Pro, the mp3 files came out to be half the size of the Media Player conversions.
The files played flawless and beautifully -- and this morning I removed them from my Sony. Bottom line was that they take up too much room on the Reader and the best I can expect is to convert 1.5 classical music CDs, which isn't enough variety for me to warrant taking up space on my Reader.
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