you need a placement site to place in iTunes, AFAIK. You can't just sign up for itunes and submit music, again, AFAIK.
How much you can make depends entirely on how many people want to listen to your band, and how many know who you are.
IMO, it's probably as easy/easier to use CD Baby over Kunaki at this point, because they can tie in the CD making process into the placement service, and IMO the results would be more consistent than Kunaki...I've heard people have had issues with Kunaki. I use them for making short runs/special orders on my band's first EP that is "out of print" and have had success, but I know others have bought bulk orders of their discs and they are unplayable and Kunaki told them they were SOL. With Discmakers owning CD Baby now, you have at least a well known company making the CD's, and they can tie in the iTunes placement and CDBaby store set up all in one fell swoop. If my band decides to do a limited short run at some point, I'll probably just do it all through CD Baby. For our last disc (2007 and reorders in 08, 09 and 2010), we used DiskFaktory and they have been great. Our latest one came packaged with a DVD, so we used a smaller company that had a complete package we were looking for (2 disc, 6 panel, full color, etc.) rather than the replication places most well known that offer more limited selections.
Aside from that, CD Baby is consistent in their work for us. We get 70 cents per song downloaded and a certain percentage (again, 70%) of digital albums purchased (which is less to buy a full album than the 9 or 10 songs individually). They send us a monthly payment for purchases made the month prior...It's a nice way to have a steady little income for your band (assuming you keep selling every month). For my band, we still make a LOT more in physical sales, but we are small time and don't tour/have national exposure, so physical medium make up about 80% of our sales (shows, mail order, etc.). We make 20-50 off CD Baby a month.