Technology can only do so much...
... then it's all about the ears.
20 years ago whilst at college, I splurged a whole years student loan on a HiFi (Linn speakers, Arcam CD player and Creek amp) and though I'd be able to listen to my music with a whole new level of appreciation. Admittedly it sounded way better than any equipment I had before, but the one factor that money can't do anything about is the standard of my hearing.
Fast forward to today, and I suffer with slight tinnitus and a related drop in my ability to hear high frequencies (12kHz+) in one ear. Despite this, I still enjoy my music. I rarely get the opportunity to listen to the HiFi these days however, so listen to most of my music via a Sansa Fuze and Sennheiser CX300 earbuds. My music is usually ripped to MP3 using LAME, set to encode VBR with a quality value of 2.
So, a couple of years ago, I set myself a blind test - I selected half a dozen tracks that I know well, and loaded them to the Fuze in 3 formats - an uncompressed WAV ripped straight from CD, the WAV encoded using my usual MP3 settings, and the same WAV encoded as a 128kbit/s WMA file. All files were put into specific playlists so that all 3 versions of each track were together, and I listened to them using shuffle without looking at which was which. After an hour of testing, I concluded that I could hear no difference whatsoever between the tracks, not even the crappy bitrate WMA's. I've repeated this test while checking which version was playing, and they still sounded the same. Obviously the difference may be noticeable if I used my HiFi, but that's not how I listen to my music these days. The one thing that is clear to me is that there is no right or wrong answer regarding the topic of audio compression, though by the number of comments that always follow any article about audio formats there are clearly a lot of people who feel strongly one way or another.
Depending on your point of view, I'm either very lucky or very unlucky, but for me I find VBR MP3's suit my needs.