the process is called ripping, and you need a special program to do it like musicmatch jukebox, or some plugin for winamp used to do them. also there alre lots and lots of free utilities that will let you create mp3's available for download from
www.downloads.com . anyway if u want to encode mp3's i reccomend that you do it at least at 96 kbs, but preffered will be at 128kbs to have a good quality and a smaller file size.
ok here are the terms:
hardware-the physical part of the computer ( cd-rom, cd burner, printer, you get it)
software-programs(winblows, easy cd creator)