The tracks for download will be encoded at 256kbps, which will be virtually indistinguishable from the original recording. But each of the tracks will cost $1.29, and those already owning the tracks can upgrade for 30 cents per song or $3.00 per album.
Apple is also offering cheaper versions of EMI tracks in 128kbps AAC with FairPlay DRM at the original price of 99 cents. Apple also expects more than half of it's catalog to be DRM-free by the end of the year.
This is a tremendous milestone for digital music I guess as it enables each of us to play the legally purchased music in any device we want. Currently music that you purchase for your iPod cannot be easily played off in another device.