EAC/APE/CUE:

1. APE file - this is original WAV file ripped by EAC and compressed by Monkey's Audio.
Monkey's Audio is lossless(!) compression (much better than RAR -mM), so when you decompress 
the file you can burn it back as an Audio CD or encode it with your favorite MP3 tool. 
Absolutely no quality loss - you have the same (or as close as possible) WAV file as on the original audio CD.

EAC Tutorial: http://www.ping.be/satcp/tutorials.htm
Monkey's Audio: http://www.monkeysaudio.com

2. CUE file - this file can be used to either split the WAV file (not APE!) to tracks (e.g. using EAC) 
or you can burn it as audio CD. 
To burn it as an audio CD - decompress APE file, put WAV & CUE in same directory and use Nero/CDRwin/EAC/etc.

Why APE:
http://www.monkeysaudio.com/comparison_compression.html