The iTunes Plus files I bought sound great in Foobar2000 and gapless playback between connected tracks (Rocket/Disarm, for example) works splendidly. I transcoded the tracks into LAME -v2 –vbr-new and used them in FB2K as well. Gapless playback continued to work fine and I couldn’t A/B them against the original AAC files. I figured a single-generational transcode of a 256kbps AAC file would be transparent, and at this point I believe it is.
I’ve seen a lot of people online bringing up the fact that Apple includes information about the purchaser in the iTunes Plus AAC files and implying it’s a bad thing. Unless you plan on giving your files to someone you don’t know, why would you care if the files are personalized? I don’t have a problem with it at all.