That's correct, iTunes Music Store only offers 128 kbps AAC music files with DRM. There was once a rumor that they would offer 192 kbps AAC or Apple Lossless, but nothing ever came of that. If you're looking for higher quality files, Buy the music on a CD and rip it yourself. I buy individual "throwaway" songs off iTMS, but if it's an album I like, I buy the actual CD, rip it at (at least) 192 AAC, and kepe the original CD on a shelf (usually- sometimes it ends up in the car).
Hope this helps.