quote:
hi there,
just a little background first, which will hopefully help answer your question

the phrase 'lossless audio' is used to mean CD quality audio - for example WAV files, FLAC files or Apple Lossless files. these directly represent the audio from your CD. but these files can use up to 1000 kilobytes to store every second of audio in a song. so for example a 5 minute song (300 seconds) might need 300000 (or 300 megabytes) of space. in practice it is not that much, but it is still very large.
lossy compression (mp3, aac, ogg etc.) results in files that are much smaller because they are compressed by having audio removed. now what happens is the audio is removed in such a fashion as to be (hopefully) unnoticeable. the maximum number of kilobytes an mp3 file will use is 320 for each second of music. so even at this maximum, it is substantially smaller than a lossless file. likewise for aac (mp4) files.
when creating an mp3 file it is possible to specify different compression rates. You could use the maximum of 320 kilobytes per second, or any value less than that - maybe 256kbps. Or 192kbps, or 128 kbps, or even 48kbps - though you *really* do notice the lack of quality once you go to that level of compression, because the amount of audio removed at that point is huge

!
BUT for the vast majority of people, 192kbps is the sweet spot for balancing file size (compression) and audio quality.
BUT - THE MOST IMPORTANT PART (sorry about the capitals

!): sound quality is a very subjective thing - most people will not hear any difference between a 192kbps mp3 and the original CD. some people will not notice the difference between a 128kpbs mp3 and the original CD. but this is something you have to try out for yourself to find out where your sweet spot is compression wise.
hope this helps, Jim.
note: there are many lossy formats out there, and people can be almost militant in supporting their own preference. at the end of the day though, as i said above, sound quality is what is important and that is purely subjective.
Source(s):
loads of research done when ripping my audio CD collection.