So now that big encodings are available. Are the 25k Kbps AAC from iTunes better than 320Kb MP3s, you rip from a CD? Opinions vary and a big assumption is what was the quality of the source (e.g. uncompressed audio). If it was a CD 44.1KHz/16-bit audio or a super high quality 192KHz/24-bit audio. There are lots of opinions but few scientific tests, but some good points. I think the basic one is that there is little different, but if you subscribe to iTunes Match, then you get their 25gKb m4a anyway, so you might as well rip to 320Kbps MP3 (with the latest lame encoder) and have both 😉

Firstly, MP3 can be made using many different encoders. Encoding 192kbps Constant Bitrate with an old XING encoder (common 10 years ago) will sound so much worse than using latest Lame Variable Bitrate at 192kbps. Lame VBR@192kbps is in most cases impossible to distinguish from a CD original. It takes good gear to be able to do it. Good equipment as well as good ears, that is. If you are 50+ any higher bitrate is a total waste. If you go to 256 VBR, 99% of the population cannot hear the difference. And most of the 1% who say they can will be lying. @320kbps they are all lying. Secondly, AAC is nothing but MP4, i.e. it is one generation ahead of MP3. AAC can compress more, i.e. lose less for same bitrate. That being said, the decade of tuning the best MP3 encoders means they are probably still better at discarding the non-essentials. I.E. it may take a while for MP4/AAC to catch up in that respect.
Via About.com

256 KBit AAC will be better quality than 320 KBit mp3. And it is possible that the iTunes Store has better originals than you had. Theres also the problem that the encoder that was used plays a role – 320 mp3 encoded with a rubbish encoder isnt as good as 320 mp3 encoded with a very good encoder. Worst case, someone might have recorded an LP with 128 KBit mp3, then converted it to 320 KBit.
AAC can use fixed bit rate or variable bit rate as well, depending on the encoder and what settings you use for the encoder.
A difference that can lead to confusion is that AAC and mp3 interpret “bit rate” different: A 320 KBit/sec VBR mp3 uses 320 KBit/sec on average; some blocks are smaller, some are larger. A 256 KBit/sec VBR AAC uses _at least_ 256 KBit/sec and never less; blocks can be larger, so files are larger than they should be.
So mp3 being lower quality at same or slightly larger file size is because the codec is much older and less advanced, but it has nothing to do with constant or variable bit rate.
AAC is better than MP3 at low bitrates but probably not at the high bitrates that are the subject of this thread. On various killer samples, I find even 192 Kbps LAME MP3 non-transparent. AAC achieves transparency at 128 Kbps. That’s what I have on my iPod thanks to iTunes transcoding all my lossless stuff when I sync.
via Whats best: 320 kbps mp3 or 256 kbps AAC from the iTunes store? – Page 2 – MacRumors Forums.

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