http://www.askageek.com/2009/07/07/will-converting-a-128kbps-mp3-to-320kbps-improve-the-quality/

Condom

In addition to smokeingbeagles link, a little more info:

As you correctly say, it's a trade off between file size, format compatibility with devices etc.

Generally speaking, the larger the file, the better the quality, and it comes down to what suits you best. you can upscale a file from the original (The quality really depends on the software you are using)

I use a high end Roland recording desk, and was using Cubase, but am converting to imac this week and will be using a new pro package called

http://www.apple.com/logicstudio/logicpro/

This is a pro package which might be well over the top for you, but is required for my expanding self recording interests.

Some more detailed information on audio files can be found here:

http://www.makeuseof.com/tag/a-look-at-the-different-file-formats-available-part-1-audio/

Lossy and Lossless are the ones to gen up on if you really want to go into detail (the names come from an original typo in a very early file converter) If you need any detailed stuff, post back, I will be happy to send you links that will nake your brain hurt :)) (nice to see you are still around!)