Before I converted all my music Cds to mp3s a few years ago (using nothing more than Lame & my Amiga) I carried out various tests on all the different bit rate encodings.
I found personally that using a VBR at between 128 to 225 bits, produced the best quality for file size ratio.
The playback quality really all depends on what your using to play the mp3s on and what type of speakers & amp you use. Having tried lots of different set ups I found that my cheap Alba MP3 player gives far superior sound than an expensive Sony one when played back on the same equipment... 
Jah. I only ever used VBR for my MP3s. It made a huge difference and in most cases didn't make the files much bigger, with the exception of more complex songs. I have for several years kept my collection in FLAC so I can convert at a whim. These days I use M4A.
