In the Rhythmbox Preferences, In the Music tab, under Library Structure, there is a Preferred Format setting. In previous versions of Ubuntu, you could edit the default profiles in the Preferred Format setting. In 11.10, this option is disabled. Why? Here is a page the highlights what you used to be able to do.
Well it looks like rhythmbox hasn't adjusted,(been maintained), to be able to edit the formats as it is now done.
Additionally RB can not encode to flac nor is it very good at retrieving cd info, all in all pretty much worthless for audio cd ripping atm
Banshee is your better choice in terms of provided player/ripper, though I'd look at other choices such as abcde or rubyripper
(adjustments done thru banshee can be seen in gconf-editor > apps/banshee-1/audio_profiles/cd-importing/
I thought that maybe the previous place local gstreamer pipelines were stored wasn't being used, turns out they can be, just not by rhythmbox.
Installed sound-juicer to check, it can edit & uses those pipelines. Rhythmbox does not so the issue is rhythmbox's
Possibly if RB is made the new default in 12.04 maybe some of these accumulated bugs will be fixed