It's not only a matter of bitrate. Using the proper encoder with the proper settings can make you save a lot of quality. If you find that 128kbps vs uncompressed is very clear, you probably didn't encode it the best possible way. The latest listening test from HydrogenAudio has shown that LAME can produce near-transparent (un-noticeable) sounding MP3 at this bitrate, if used with the best settings. Sorry to sound so boring with these listening tests, but that's the only way I know to show concrete facts. I don't say "I prefer LAME", I say "people in general prefer LAME". That's what listening tests are for.
I use LAME for everything, no need to convince me.
128kbps is still a massive difference for my ears. I do a lot of testing when I'm encoding my own music, and I found (like I said) that 256kbps seems to be the minimum for me to not hear a difference.
edit; keep in mind I'm talking about CBR not VBR.
You wouldn't have to use such a high bitrate as 256kbps to get transparent sounding music if you were using VBR. Like I said, it's a waste of diskspace.Oh, and let me add that simple VBR doesn't produce the best results. The recommended settings for LAME that I gave in the first post gives even better quality (they are "optmized" VBR).