I have iTunes on my Mac and use an iPod, so it is all very seamless. I like the service just fine and the quality is great to me.
I rip CDs to iTunes and burn iTunes Music Store downloads to CD.
Songs are 99 cents, but on certain albums a particular song may only be available if you purchase the entire album. Flip side is that some albums have more than 10 songs, but only cost $9.99 for the entire album. I think it depends upon the agreement between the label and Apple.
I don't mess around with altering the music or adding fades, so I have no idea about being able to do that.
I believe the license for downloaded songs is for 5 computers. You can decommission old computers and add new ones when you buy a new computer.
Personally I love it, but as a Mac fanatic, I am probably biased.