Another "stereotypical audiophile" responds
Puppies asked: "What bitrate and encoder are best if you want basically flawless audio?"
Flawless is obviously a relative term these days.
On an iPod, I think the technical answer would be AIFF (which is 1411kbps). Now obviously that eats up a ton of space, but that's what it takes to "get every last bit" off when ripping from a CD. No matter what Steve J. or anyone else says about (take your pick) 128, 192, or 256 etc. being "CD quality" -- they simply are not.
If you consider CD's "flawless" (and I would certainly not), then you could stop there.
If you really want to get about as close to "flawless audio" at home you really do owe it to yourself to listen to SACD's (or DVD-Audio) which packs about 4x the data density of CD music. Of course at these kind of data rates, a 40gb iPod would hold only about 100 songs (if you could rip the DSD data on a SACD which you can't).
All that said, personally I rip CD's at 320kbps MP3 and am satisfied for casual listening (through earphones or via the home stereo). The 128kbps AAC's I've downloaded from ITMS are "ok" -- sort of like listening to an FM radio.
Bottom line IMHO, for really "flawless" audio at home, the only real choices in formats are SACD/DVD-Audio and analog (vinyl)...
I suppose I've now just about wrestled myself the title of "stereotypical audiophile" for the day with this response
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