I did a comparison not so long ago
http://nigelcoldwell.co.uk/audio/
i did MP3 in various bit rates, (as well as WMA, AAC, Ogg Vorbis, FLAC & WAV.) you could try downloading them at the different rates and seeing what is the best quality for you and your setup. it's a very personal thing.
I'd still stick with MP3 simply because everything can play it.
the biggest conclusion i reached was how much better variable bitrate MP3 was over constant bitrate. iTunes does not support this, presumably because they don't want you using it. cheeky really.
It's worth mentioning that if you have 16GB of storage at 128kbps this is roughly 11 days of continuous music or 250 albums. unless that is what you want then it might be worth ripping higher anyway.
over 128kbps you can't hear really hear the MP3 artefacts, it's more about if you compare it to higher bitrates you notice that there are bits missing.
the normal sequence is to rip to a lossless format, so you only have to rip once, say you want to play your music on a home media player with lots of storage, and then to transcode it if you want it for say a portable device.