I finally found a couple more resources on this topic:
I was surprised by Gunnar's findings (second link). He certainly appears to know far more about this type of testing than I do, has better equipment, and knows what to listen to when comparing the different encoding schemes. I'm not able to describe the differences I hear as he can. But to me, standard MP3 encoding in iTunes has noticeably *bad* results. To me, AAC at 128 sounds better than standard iTunes MP3 192, and I have a hard time telling the difference between AAC 128 and LAME alt-preset-extreme (approx. 320 VBR).
His music selection of course makes a difference, and he may listen more critically than I do, but my threshold for "quality" sound seems to lie at the AAC 160 or 192 level. Perhaps I need to test on a good stereo system. Maybe this is how I can justify such a purchase to the wife.