Select the iPod's icon in the program's side window and click the "Convert higher bit rate songs to 128kbps AAC" box.
Click "Apply" in the iPod's storage capacity bar in the iTunes window to apply the new iPod preferences. iTunes will automatically search for high bit rate songs on your iPod and convert them to 128kbps.
Right-click the iPod's icon, and click "Eject" to remove the device.
Your iPod's storage space is limited to the size of its hard drive, and to maximize your device's space you can reduce the size of your music's file size by reducing the quality of your music library. According to Apple, the iTunes 9 software includes a bit rate converter that, when enabled, will automatically convert your iPod's music to 128kbps Advanced Audio Coding (AAC). While the original songs will not be converted, your iPod's music files will be condensed, which allows more songs to be added to your iPod.
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