First, you rip the CD to mp3 format on your computer. The higher the format, the better the quality, but the more space the files take up. 128 is usually the accepted minimum, while 320 is the maximum and is nearly lossless quality. I rip all my CDs to 320 kbps mp3s.
Then, you share the folder (or put the mp3 files in your shared folder).
How to share folders
Hope this helps
Dano