I encode my mp3's with stereo 160 VBR, quality high and standard stereo.
I have it all hooked up to my HiFi, a Cyrus dAD3 cd-player ($1400), Cyrus Straight Line amplifier ($670) and a Cyrus Power preamp ($800). All hooked up to my speaker's two System audio 1070 ($970).
...I LOVE my system.