I prefer the 320kbps mp3 bitrate because I've noticed that there is a specific type of sound that reveals the poor compression of a mp3 file: try to listen to crowd clapping hands in live concerts in various bitrates. If the file is not well encoded or poorly compressed (anything under 320 is poor for me) you will notice some grainy, as it was artificial, analogous to low res vídeos in full screen or even actual audio in low bitrate, like those extracted from low res videos.
If there´s one disadvantage of mp3 it´s that its short block window size is too big, leading to smeared transients on occasion. This will happen with low as well as high bitrates. http://www.mp3-tech.org/content/?mp3%20limitations
AAC or WMA completely avoid this in comparison. But I´ve yet to manage to encode to working AAC (the X3 somehow ignores my encodes) so I´ve opted for WMA Professional for the time being. Secondly, the FiiO doesn´t decode mp3 or aac with 32 bit floating point, despite the fact that this would be easily possible.
Edited by Marlene - 11/6/13 at 6:53am