[Update: I ended up trying this auto-compression feature out, see this post for more.]
I spent all of my time being scared of iTunes 9.1 that I never realized that it actually changed something for non-iPad users. TUAW has reported a new checkbox on the main iPhone page within iTunes, which allows you to automatically convert files to 128kbps AAC, which is half the bit-rate of most iTunes downloads (256kbps AAC). So if you’ve got a music library with relatively high quality tracks, this auto-conversion could save you quite a lot of space. The sound quality will almost definitely take a hit (it’s unfortunate that you can’ choose the auto-conversion bit-rate), but it’s probably noticeable except on earphones that cost more than $40.00 or $50.00.
I am curious about how much space I might save if I were to do that with my 11GB music library. The core iTunes files on my Mac wouldn’t be touched — just the files transferred to my iPhone. Never mind the fact that I wouldn’t know what to do with all of the extra gigabytes of space, it just sounds like a great idea to free them up.
Anybody tried this out and have some feedback to share?