"128 is far from CD quality"

Only 16bit/44.1 kHz (i.e. the usual standard) WAV is CD quality.
Any MP3 is less than CD quality, but the question is what you can get away with.

128k MP3 is sometimes described as "FM radio Quality", or tape cassette (though the latter vary a lot).
It's OK for listening on your iPod, in the car, casual background music, typical cheap computer speakers etc but I certainly wouldn't want 128k MP3 as my master library copy of anything important. It's also a definite no-no for music that's going to receive any further processing.

Few people can distinguish 192k or 256k MP3 from the original, and when you get to 320k, I think you'd need a top "golden ears" mastering engineer with custom designed listening room and speakers I couldn't afford without selling the car... and then carefully selected music that shows up the compression artifacts.

I usually set 160k ABR (Average or Variable bit rate, which is better than fixed bit rate) for MP3s to upload to the web.
I have noticed an improvement by going up to 192k in the sound track for YouTube videos, but that has to do with the fact that they get re-compressed by YouTube's processing and you really need good audio to start with, or the result ain't pretty.

Anahata