I was always under the impression that it means that it will be around 320k at most but lower in cases where the music is very quiet and doesn't need that much sampling....
But, as I just loaded some 160kbps VBR in my Foobar2000 and watched the bottom caption as a song plays, it actually goes to over 200kbps (and as low as 130kbps). Time to read up on the theory....