If you wish to preserve all the sound quality but in a smaller file size, convert to FLAC, as this is a lossless format.
If you want a smaller file size, use mp3, and choose a 320K bit rate for maximum quality or 192K for decent quality. (NOTE: while mp3 is a lossy format, if you use the higher bit rate, you will need a really top notch system to hear any difference)
If you intend to archive the files, always use a lossless format.
Here are some converters free
Hope this helps