The fastest way to use a protected audio file from itunes on another device is to cut the file to an audio cd (which removes the protection and coverts it to wav) and then rip it back as an mp3. I copy all my purchased music to cd's anyways as a backup and to play in my car, so this works for me. CDR's are pretty cheap these days anyways.
To use your home cd's on your Ipod, you should be able to rip them from right within itunes. You even have the option to rip them as MP3's instead of the proprietary aac format apple uses.