Problem solved! I went into the store and the genius reset my privileges, not just for the iTunes library but my whole account. Apparently iTunes needs to access folders outside it's own library. This fixed the cd importing problem I was having.
BTW, I had also been experiencing problems with some of my friend's AAC songs not working on my macbook. It turned out to the be the fact that some of the artist folders on the disc my friend made me had somehow become "locked" at some point. By going through and unlocking select folders on the cd, I was then able to get everything to import fine. Hope this helps someone else who runs into this problem.