I listen to streaming music off my iPhone all the time in the car. After dabbling with MOG, I settled on Spotify because I prefer the user interface as well as its radio functionality. As far as sound quality goes at 320 Kbps equivalent, I couldn't hear a difference in my car. That said, while my car stereo is pretty sweet, it still doesn't compare to listening through a set of reference level headphones. I wish I could say that I A/Bed the two services through a set of phones, but I didn't. Finally, may read on other forums that MOG has more content available at 320. That definitely was true at one point, but I think Spitify has caught up.
To answer your question about sq more generally, I'm content wih 320 MP3 / 256 AAC / Ogg Vorbis level 9 compressed music. While I have, on occasion, been able to pick out an artifact or two when A/Bing near these near-CD quality formats against uncompressed CD tracks in certain very complex passages, this is rare. Usually I can't hear any difference. IMHO a much bigger problem is frequent poor recording or mastering quality of albums. I think that often, when people point out artifacts in [near-CD quality] compressed music, they are actually hearing flaws from the recording/mattering process.