I agree. In my personal listening tests, 128 mp3s can sound pretty bad. I'd never voluntarily chose that. I've even heard problems with 256k mp3s.I agree with this for the most part. I notice a huge difference between 128 encoding and 256 encoding, especially with high quality headphones, but as I start to listen up and up to lossless etc, I dont notice the difference as much..there is a difference, but just not as big to me. I write and record music so the quality of sound is very important to me, however the size of downloadable files is also important, as is whether the format is compatible with most media players.
The silent majority seems fine with 128 mp3's. I personally think 256 should be the minimum standard, especially given the price comparison between a physical CD and an downloadable album, where most of the time the prices are very close.
The vocal minority usually screams for FLAC or something. Listening is highly subjective though so to each his or her own.
I have never noticed an issue with a 128k aac, but I probably haven't recognized what to listen for. I'm therefore ecstatic with a 256k aac.
I know of one intro to one song that sounds really bad at 256k mp3 that might also have a problem with aac, but I haven't tried it. Its such a rare occurrence that its not worth worrying about. This particular intro sounds like rain hitting glass or metal causing fast rythmic high pitched yet very quiet sounds. 256k mp3 makes it all garbled and unintelligible.