personally I use my ps3 to rip cds to aac but have also been looking into this lately and just conducted a quick test.
I put the cd in the drive, opened nautilus copied a track to my Music directory (this was already in wav format) and used neroAacEnc with this command
$ ./src/NeroAACCodec-1.5.1/linux/neroAacEnc -br 128000 -if ~/Music/Track\ 2.wav -of ~/Music/Java.mp4
at a bitrate of 128k it still sounds good and has gone from 45.4Mb to 4.2Mb so you could probably afford to up the bitrate unless space is at a premium.
Interestingly mplayer reports: encoder: Nero AAC codec / 126.96.36.199
not 1.5.1, either way, it works and the output is impressive enough