Bit Rates and Sound Quality
Selecting Bit Rates for Encoding
Bit rate refers to the speed at which a bit stream (compressed audio data in this case) will travel, or the amount of bits per second. With MP3, you usually refer to it in terms of kbps or how many thousands of bits per second. Just like the way film works with a higher number of frames producing a better picture, the more audio data that flows in a time period, the smoother and clearer the sound. "So what real difference is there in sound quality?" you might ask. Check out this MP3 bit rate page (courtesy of MP3-Tech.org, a good tech resource) where Gabriel Bouvigne ran a comparison of one track recorded at different bit rates and noted the difference. Many MP3 enthusiasts will convert to MP3 at 128 kbps (kilobytes per second) as a good medium in sound quality and file size. However, I recommend 160 kbps or VBR encoding, especially if you are a musician or if you have a sensitive ear to musical quality.
Streaming MP3 Audio and Different Bit rates
One other useful tool is this chart courtesy of Audioactive, makers of Audioactive Production Studio, a high-quality MP3 encoder. Using the chart provided, you can select a bit rate that meets your sound quality needs while being sensitive to the file size drawbacks of the higher rate if you are streaming the audio file over the Internet.
Constant Bit Rate Encoding
Constant bit rate encoding is the standard method used by most encoders. With CBR encoding, the same number of bits are added to each frame of the audio data regardless if there is silence or a wailing guitar solo. This method is good to use if you need to predict the size of the encoded file. It is simply calculated by whatever bit rate you have chosen to encode with multiplied by the length of the song.
Average Bit Rate Encoding
Average bit rate encoding (ABR) lets you choose an average bit rate and the encoder adds bits where necessary.
Variable Bit Rate Encoding
Variable bit rate encoding (VBR) is a method that seeks to keep the quality of the sound file high throughout the encoding process. Software with this technology makes a decision when to add bits to the file if the stereo separation is ever too far apart, producing a much clearer sound. The end file size will vary after encoding depending on what decisions the software has made. Simple parts of songs, including moments of silence, will not need the same amount of bits as more difficult parts and VBR encoding is able to make an intelligent decision regarding where the bits are needed most. Use this method in encoding if you want the best quality possible and are not real concerned about the file size (usually pretty close to that of regular CBR encoding, sometimes smaller).
For more good reading on bit rates and sound quality in the encoding process, read Fraunhofer's encoding basics or "enter bit rates" on chapter 2 of MP3: The Definitive Guide.