How much audio quality is lost converting 320kbps MP3 to 128kbps AAC?
I'd like to know so that I can store more files on my iPhone and iPod classic (also to make the iPod classic hard drive spin less). Also to save space on my Macbook hard disk
Well, the real sequence of this conversion is the following:
WAV 44.1khz/16bits -> MP3 320kbps -> WAV 44.1khz/16bits -> AAC 128kbps
In the first transition (from wav to mp3) you are losing audio information, that information is missing when you convert it back to WAV and it cannot be recovered.
Then you lose even more audio information when you convert that "incomplete" WAV to AAC 128kbps.
So you will get pretty crappy audio files, worse than regular AAC 128kbps (they usually came directly form CDs). So you can think of them as 96kbps AAC or maybe worse because different lossy codecs cut different things.
Going from one lossy format to another lossy format is not a good idea.