There are other threads where people have been experimenting with this, attempting to decode ATRAC3's from the Z1/Z2 and upload their own.
Basically, although the Z1/Z2 uses the ATRAC3 format, it's somehow modified and not a straight ATRAC3 file. There seems to be some differences in formatting and some sort of DRM security built in. Needless to say, Pioneer is using it's own proprietary version of the format.
And, assuming you ever did crack the format, you'd then have to crack the indexing/uploading scheme. There are hundreds of empty folders in the music partition which need to be filled in a certain way, as well as an index file(s?) which is updated when importing a disc and is responsible for quickly browsing the library. In much the same way, you can't just drag MP3's to the ipod.
I'm not trying to be negative - I'm just warning you not to get discouraged when dragging-and-dropping ATRAC3's doesn't work. If it were that easy, we'd have cracked it by now. =\ Plus, since it's easy enough to just burn and rip audio-format CD's, well, yeah.