In reply to:

At what bit rate would you consider it acceptable for "hi-fi" listening?



I can tell the difference usually, but a 320kbps MP3 DOES do a pretty good job. 256 VBR is pretty good too. Below that...

In reply to:

Is the variable bit rate better or worse?



Define better or worse. It will result in a smaller file with largely equivalent sound quality to a higher bitrate file.