There are scientific studies that prove that MP3s above 256 kbit/s and AACs above 192 kbit/s are not distinguishable from the originals even with good audio equipment. There is enough heated debate going around on the Internet on this topic as well which you can dip into if you like. I thought 128 kbit/s and below is really compromising quality, but I haven't bothered looking for the 'perfect' cut-off, something which will depend on the song anyway. On my iPod I carry around AAC 192/256 kbit/s files which is perfectly fine for casual on the go listening. The bigger choice to make is the bit rate. There is extensive debate around all kinds of other formats, but to be honest I doubt you should care. I have not tested it extensively and it is likely subtle. AAC is considered to be a better algorithm than MP3, meaning that it is supposed to achieve better compression at the same quality level. For my iPod, however, I often do use compressed files (the iPod audio is actually that bad -). I would never want to listen to lossy files on it as they all tend to sound 'harsher' than CDs. I have ripped all of my CDs as lossless to play them over my fancy home stereo. The question is whether it is audible and whether you care. Technically you almost always loose quality if you rip to AAC/MP3 (it is called 'lossy' compression for a reason).

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