Firstly, "ripping" is the process of extracting audio from a CD, "burning" is writing to it.
It's AAC format, which is apparently destined to be the new standard format for audio compression. There's no DRM or anything on what Winamp rips, and it can be played by most new portable players these days. It's better quality than MP3. So what's the problem?
In contrast, if you rip using WMP by default, files will be in WMA format, which is restricted to play on one computer by default.
In addition, you may remember seeing this image when you went to download
Note that there is clearly no tick in the "Rip/Encode Music into MP3" column for Free. Is that not clear enough for you?