I know there is a chorus of people here and on the Apple forums who simply refuse to believe that there are others who can tell the difference between 128 bps and CD-quality. Well, you're just going to have to believe us, because if you can't tell the difference yourself, then good for you! You have nothing to worry about and should just buy all of your music directly from iTunes.
But I can tell the difference most of the time. The sound from a 128 bps sound file is "flatter." The same music heard directly from the CD is richer and "sparkles" more. High notes are sharper and resonant on the CD, while in the 128 file they are tinny and muddier. The difference isn't huge, but it's noticeable to me.