320 Kb/s VBR (variable bit rate) is what I use for my MP3 player. For complex areas of the song it will bump up the bit rate, for less complex areas of the song it will bump down the bit rate.
I use lossless on my main computer hooked up to my Axioms.
I had a thread about this earlier...but I'll merge some of the content in here. Basically, what you lose (mostly) when you use lesser quality MP3's is the crisp high end. Since treble sound has more information (high frequency) it takes up more space.
If you are going to devote a 80GB or 120 GB hard drive entirely to music, I would go for a lossless audio format.
To give you an idea, each song is about 20 MB if done in a lossless format. If you have an 80 GB hard drive, you could fit about 4000 songs.
Depending on your music collection and hard drive, that could all change. I like having the lossless format because they really have a crisp high end. If I really listen to acoustical recordings there is a noticeable difference between a lossless file and a compressed file.
It's all up to you. From what I've read, most people can't tell the difference after about 256 Kb/s.
