Thinking of buying just USB/aux head unit for the car as its cheaper but also sick of holding, loading and storing lots of discs.

Thing does USB-saved CD’s drop in playback/stored quality?

Do I need software on my PC to enable transfer?

yes

Yes, and yes, something like iTunes. However, it’s up to you to set the bitrate, anything above 256Kb/sec will be just as good as the original as far as your ears are concerned. I rip mine at 320Kb, but I have a lot of 256Kb files downloaded to my phone, and I can’t tell them apart through quality in-ear monitors, so you certainly won’t in a car environment.
I have getting on for 16,000 ripped tracks, well over 155Gb, and I very rarely play CD’s, although I still have all mine.
And still buy them, if I can get them signed.

Aye, I used the scientific approach of ripping at a rate that I couldn’t tell any difference (256) then going up a step anyway, just in case. Maybe with a really good stereo or cans there’d be some bothersome difference but in my car? I bet 10 scottish pence that nobody could actually tell the difference (I bet a further 10 pence that lots of people would be convinced they can though, if you told them which was which)

Northwind – exactly! I can’t tell the difference with a £300 pair of UE TripleFi Studio Pro IEM’s, playing random Lossless/320/256 files on my Pod or phone. I can hear clear differences in the mastering, though.

In my opinion the quality will not be a problem. I’d worry more about how good the head unit is at letting you find and select tracks, use play lists etc. a bad one will drive you insane. My preference is for a Bluetooth head unit that I can stream music from my phone too but that’s because I have all my music on my phone.