MP3 seems to be the format everyone is going for. Its more a case of which recording medium you use, i.e. memory stick / flash card / Ipod type device, CD-R, or even DVD.
Building a database of MP3s on your computer seems to be the way forward - then just burning or copying to your CDR for portableness.
Surely you could rip your MD back to MP3 format on your computer ? If your MDs are shop purchased albums and thus you have paid for the license to own that peice of music, then making a copy for your use/backup in MP3 format whether that is ripped off or even downloaded from P2P is legal ?