in fact most audiophiles cant tell the difference between compressed @ 192 and uncompressed...so i dont really understand what the big deal about this whole lossless thing is...
bottomline - a good set of headphones make a big difference.
The big deal is that if my CD collection is stolen, I can burn a perfect CD copy from my lossless backup. If you make copies of copies, you WILL end up with problems you CAN hear sooner or later. For my iPod and car I use 256/kbit (because 128kbit CAN potentially degrade the music a little bit with AAC; with MP3 128kbit can sound pretty bad at times, depending on the encoder so I prefer to see higher rates when buying "compressed" music just to be on the safe side. Why do I use the lossless files at home? Because they're there already for backup purposes so why NOT use them? Audible difference or not, if you have both on your hard drive, why not use the signal that has no compression on it?
Beyond that, I agree most "audiophiles" will believe anything you want to sell them. I argued for years on rec.audio.high-end (newsgroup) with people that believed painting green marker ink (by a specific company of course; not just any green ink would do for SOME of them; others thought any green ink would work) made a CD sound better. Yeah, right. On the other end of the spectrum, just because Bose is 'famous' doesn't mean they're good bang for the buck (they are not). Yet average consumers fall for that crap too.
I use Carver AL-III ribbons with an active crossover and plenty of power in my music-only room. I got them for $1175 delivered on close-out from Oregon (they retailed for $2000 a pair). To me, they sound better than speakers I've heard that cost over $5000 a pair. Yet my new home theater uses three sets of $800/pair PSB speakers along with a $1200 subwoofer and they sound pretty darn good to me. They are +/- 1dB in frequency response. I've seen $10,000 speakers that aren't that precise. That is one measurement only, but it's an important one. More importantly, I'm happy with them and that's all that matters period, really.
None of this proves to me that Apple knows how to make good quality headphones. The earbuds (how exactly ARE you supposed to keep those things tight against your ears; they fall out so easily....) they include with the iPod are total CRAP. I use Koss Studio Pros normally and JVC noise-canceling headphones when on a plane or in a noisy environment.
As for "in the ear" type headphones, it's best to get custom molded plugs if you want the best possible comfort (I had that done for my musician ear plugs and they're great for going to live concerts; a headphone version simply replaces the filter area with a speaker driver). I'm not crazy about in-the-ear model headphones, though because of the increased danger of accidentally destroying your hearing (studies show that headphone listeners tend to crank up to unsafe volume levels far more often than when using external speakers and that much more so when they're in your ear canal. I can at least double-check my regular over the ear headphones volume level at the speaker diaphram with my sound meter to see if I'm listening too loud. It would be near impossible to guess the actual volume level in the ear canal as you can't meter it directly at all.