First, a comment on the myth that vinyl sounds "superior" to CD's. I know there are a lot of people who believe this, but it's not literally true. Vinyl imparts a particular sound to music which some people enjoy. I know I have songs in my library where the artists have intentionally inserted the pops and hiss and dynamic compression of a vinyl record into the song itself, but in the best case scenario, CD quality digital audio will offer superior audio quality to even the best mastered LP records.
There's a historical element of truth to the belief that some albums sound better on LP than on CD, because good mastering of LPs has been well understood since the 1970s, while poor mastering of audio CDs was common until the mid-1990s. There are a lot of tricks that needed to be discovered to build up a set of best practices for mastering digital audio, just as there are tricks for mastering LPs for the best quality. Unfortunately, CD's issued in recent years sometimes suffer from the disease of over-compression, a consequence of the Loudness War, which leads to poor audio quality.
Don't get me started on the loss of audio quality caused by the common psychoacoustic (lossy) compression techniques used by MP3, AAC, Ogg Vorbis, and other popular audio codecs to remove portions of the audio that your ears and brain are not supposed to notice are missing. That's a topic for another post. I'm digitizing LPs at DAT quality (48 kHz, 16-bit samples), saved as FLAC (lossless compression which preserves the original bits), from which I can convert to MP3 or AAC if needed, so the appropriate comparison is to CD's converted to FLAC.
For those who want to believe in some mystical purity of analog audio, you're buying into some voodoo. For more on the psychology of the vinyl vs. CD debate, as well as the thoughts of recording engineers with experience in these matters, see this NPR story, Why Vinyl Sounds Better Than CD, Or Not.
The upshot is that in the very best case, an LP can sound indistinguishable from a CD, but there are a whole bunch of little details that you have to get right in order to get the best sound. For a CD, the only piece that needs to be of a high quality is the final digital-to-analog conversion stage, which usually happens in the receiver connected to your speakers, or the audio chip connected to the headphone jack in a portable device. The only requirement for the CD is that it not be so scratched or damaged that the bits can no longer be read from it. For an LP, the quality of the analog signal from the record needle has to be preserved as much as possible until the samples are digitized. This means that the record needs to be clean, the needle needs to be clean, and the turntable has to be well-designed to avoid distortions such as rumble, wow, and flutter.
Traditionally, a turntable will output an analog stereo signal at the unamplified voltage generated from the magnetic fluctuations in the cartridge, measured in millivolts. Then a phono pre-amp is used to amplify the signal to the more common line-level voltage used by analog audio inputs to a stereo receiver. The pre-amp also has the important task of reversing the RIAA equalization that is performed before mastering the disc. RIAA equalization reduces the bass frequencies by up to 20 dB so that the needle doesn't jump out of the groove on tracks with heavy bass. It also boosts the treble frequencies by up to 20 dB so that the background hiss picked up by the needle due to imperfections in the surface is reduced when the record is played back (similar to Dolby noise reduction in cassette tapes). Finally, the analog line-level signal can be digitized by an analog-to-digital converter.
Rather than three separate boxes, I'm using a single turntable that was designed for this application, as well as for DJ's spinning records in clubs: the Stanton T.92 USB. In addition to outputting analog audio at either phono or line-level, it includes an A/D converter and both USB and coax S/PDIF outputs. For digitizing, I've connected it to my MacBook running the free Audacity audio editor. So all of the analog stages are happening completely inside the turntable, which minimizes the chances of introducing interference or reducing audio quality due to cheap cables connecting the components, and eliminates having to set the various volumes to the appropriate levels to avoid clipping.
I had to change two settings in Audacity to get the best audio quality. The first was increasing the sample rate from 44.1 kHz to 48 kHz. While this makes a small difference in practice, especially if your hearing in the upper frequencies isn't good enough to notice, but for this turntable, it sounded to me like the absolute quality is worse at 44.1 kHz than would be expected merely from the lower sample rate. Either way, it's better to capture at the higher sample rate and resample down to 44.1 kHz if necessary than to have not captured that info in the first place.
The second change was to disable dithering in Preferences: Quality. Dithering is a step that is intended to reduce unwanted high-frequency "aliasing" but in practice, because the samples are originally 16-bit, they don't need any further processing or rounding of values, and any such dithering only reduces the high-frequency aspects of the sound. I've discovered that iTunes on Mac OS appears to automatically dither the output, which leads to slightly reduced quality in my experience (it's especially obvious that this is what's happening if you try to play a high-frequency 16 kHz "mosquito tone" through iTunes, which will play with loud low frequency overtones introduced by the dithering process).
Finally, I replaced the turntable cartridge bundled with the T.92 with a replacement cartridge designed specifically for digitizing records, the Ortofon Arkiv Concorde. It was a simple plug-in replacement for the head shell bundled with the T.92. One word of caution: the cartridge came with an O-ring to insert between the cartridge and the tone arm, which was differently sized to the O-ring on the bundled head shell. I originally used the O-ring from the Ortofon, and it did not dampen the sound sufficiently, causing the tone arm to vibrate loud enough that the music was clearly audible from the audio vibrations of the tone arm. This is clearly going to introduce distortion into the process. Using the O-ring from the Stanton head shell with the Ortofon cartridge eliminated the vibration transfer to the tone arm.
The last point I wanted to make was the importance of cleaning the album before playing it. Vinyl albums can easily build a static electricity charge, which attracts dirt and dust, leading to pops during playback. I was able to acquire a Discwasher cleaning brush from a friend, which works like a large lint brush to pick up the dust from the records. These cleaning kits originally came with isopropyl alcohol-based cleaners, which are not recommended because they can damage the vinyl. Instead, I'm using a fuzzy cleaning cloth from an LCD cleaning kit (the kind used for cleaning glossy LCD screens), along with a bottle of Xtreme Klean screen cleaner from Fry's electronics. The ingredients are listed as deionized water and "proprietary polymers." More important is what it doesn't contain: alcohol or ammonia. It's also antistatic, which is good. Records should be cleaned by brushing in a circular fashion, so as to minimize the chances of scratching the grooves.
I'll add some photos and additional comments later, but I think this covers the basics. Please let me know in comments if you'd like any more info on any of the steps. Happy listening!