I voted for AAC/MP4, but realistically speaking ogg and FLAC are the ones most important to me. Plus wouldn't there be some sort of issue regarding patents, licensing, or some other nonsense to implement AAC?
I think so long as you are not creating registry entries that CDburnerXP will depend on in order to properly function it should be "portable". I put quotes in there because it will be portable in the sense of plugging your USB drive into a computer and running the program, but the limitation would be that .NET be present on that computer. I have written a program of my own in VB2005 and it's portable in this way. Just so long as .NET 2.0 is installed on the host machine it will run.