I just imported a cd using iTunes v9.0.2.25 and the Apple Lossless Encoder.
This created m4a files in my iTunes library.
These must be protected files.
I tried to use them in C2010 and it wouldn't use them.
I tried to play them in WMP11 and it wouldn't use them either.
I could play them if I used iTunes.
As iTunes downloads are m4a and protected I'm thinking that when you use iTunes to rip it creates protected m4a files.
You'd probably be better off using Windows Media Player or Roxio itself to rip your cd's.
I have the same version of iTunes, and when I first started importing from our CD's, to put on my wife's iPod Touch, I did the first CD as Apple Lossless. The size of the files, alone, resulted in me making the decision to dump those first files and import them as mp3s at 192 kbps. They sound fine, especially with the iPod connected to our home theater speaker system.
There is no problem playing, or using any of those mp3 files anywhere I want. The Apple Lossless works in iTunes, and that's the only place I got it to work.

I agree on using EMC 10 to rip the CDs, if you want to go to a higher quality on the iPod than mp3.
Thanks for the replies. I've already imported all my CD's through iTunes, so that ship has sailed. Does anyone know if the newer versions of Media Creator (2009 or 2010) play nicely with the Apple proprietary files?
As per Steve's post, they can't be used in Creator 2010.