Here is a great site that provides results of public listening tests of various compression technologies at various bitrates.

1. The first test compares AAC files @ 128 using different encoders.
2. The second takes the winning 128 AAC encoder and compares it to other common formats and encoders, including LAME @ 128.

3. The third test compares files encoded at low 64kps bitrates.

Summary, at 128 bit rate, AAC, and in particular AAC encoded with iTunes /Quicktime is really strong. AAC is not as well suited to low bit rate (64kps) recording, but of course, no one concerned about file quality uses 64kps.

http://audio.ciara.us/test/

Check it for yourself. What d'ya think?