I used Delitracker and 14bit AHI output, and it sounded great. Haven't used my Miggy to play MP3s for a while, but back in the day I tried early versions of AmigaAMP but didn't like it.
You'll be fine with 060, Delitracker and AHI.
There are also CD audio rippers (although I used MakeCD to rip audio) and there are MP3 encoders too. But even on 060 you'll be waiting quite long to encode that CD audio into MP3. I used to rip the tracks to HD and then make a script that copied each track to RAM, encoded it, copied the MP3 back to HD and then deleted the track in RAM. This was so I could leave the thing running overnight without the HD tick-ticking continuously.
