LAME seems to be a very high quality encoder for MP3's, a lot of the writer-bundled plug-ins or device embedded encoders might not be. These appear to be the source of the few internet tracks I've tried. If I'd only heard those, indeed I'd be saying "MP3 sucks"...
I originally encoded my CD's at 256Kbps high-quality mode MP3's. I noticed Mozart piano sounded wrong at 192KBps, hence the jump higher. I then adopted lossless APE encoding (650-950Kbps) because I thought I could hear the difference. Well I think on one track, a cymball sounded slghtly less sweet once!
foobar2000 has a few great features for trying this yourself, first it has a converter, which will allow you to write a second copy of a track as MP3 (LAME) or FLAC or others.
You then can run the ReplayGain tagger against them to ensure they play back at the closest possible level to each other, as some encoding can change the level by a few bits of a dB.
Then you can select any two tracks, right -click and choose ABX compare. It then runs a blind test comparison where you can listen to A, B , X, or Y tracks, where they are randomly assigned and you have to say if A=X or if A=Y.
I'm amazed at how hard this is to tell, even at 160Kbps through a relatively well tuned AV/hi-fi system. I do plan to read critical listening notes and re-test as I and a few others I've subjected it to have real trouble telling lots of digital sources apart, incl 24-bit 44.1Khz v.s 24-bit 96KHz upsampled, which really surprised me.
There also now apprears to be an auto-rate setting in LAME which takes the bitrate it needs for a given quality level, which at the 4 default works out to about 140-180Kbps on the few I things I tried, I suspect this is a great compromise for a really close to original MP3 library, at reasonable average bitrates, but a little higher if some material needs it.
I think it still makes sense to have a main media library as lossless in a high-quality hi-fi media-server, as a good, quiet 250GB (Western digital WD2500PB) hard disk is now about £120+VAT. If they were stored as lossey compressed then you'd have a quality drop whenever re-compressing them for any other device in future.
Also as you upgrade your kit around it, you never know if suddenly the lossey MP3 type encoding is limiting the audiable quality, it's one more thing in the chain that doesn't strictly have to be there.
regards,
Rob.