Old thread, but I just stumbled across it.
Look, the fact of the matter is that the output (even outside of high/low frequency ranges) is not bit-identical between lossy and uncompressed audio. Now, will anyone notice those differences? That isn't as simple to answer as "yes" or "no" - it depends entirely on the hearing of the person in question, but more than that (and I've seen nobody in this thread mention this), it depends on your equipment.
If you have a very high quality audio pathway (high quality DAC/AMP) running to a very revealing pair of high-quality headphones like Etymotic ER4Ps, k701s, etc then you will definitely notice differences between 320/v0 and FLAC. Anyone who doesn't have major hearing loss and has spent a lot of time with a pair of ER4s would have to testify to this. I've done a lot of ABX testing personally with such a setup. I can't always tell with all songs, but normally FLAC has a warmer, smoother characteristic to its sound while the MP3s come across as harsher. It depends on the song, how it was originally mastered (poorly mastered music sounds bad enough to begin with that it's harder to tell .. though sometimes mp3 compression added to an already almost-intolerable recording pushes it past the point of sibilance with revealing headphones), etc. Sometimes mp3 sounds distinctly, flagrantly bad on revealing headphones, while sometimes it's much more subtle. It's usually not a blatant difference, though, and with less revealing headphones I'm more hard-pressed to notice a difference. But I've spent enough time listening with headphones like the ER4Ps that I know that the sound is different - it's just harder to pick out the difference with headphones that are less revealing. Heck, even cheap headphones are still going to output a more authentic sound from a FLAC source... they just do a poor enough job representing sound in general that the minor differences between mp3 and flac will be lost in all the other distortion that's occurring.
When you're getting to the point that you're spending significant amounts of money to improve your listening setup, the minute differences in the sound between MP3 and FLAC suddenly become significant. After all, more storage is dirt cheap, while other things you might do to try to improve sound even marginally can sometimes cost thousands of dollars. Why would you forgo even the occasional, minor, benefit to your sound quality when you can easily have guarantee bit-perfect output from FLAC?
In short, if you don't have a high-end listening setup (or possibly for portable listening) then sure, use v0/320 mp3s - the difference between them and flac will be insignificant enough that it won't really matter. If you have a high-end setup, there's still little difference, but there's enough that it's foolish to spend big bucks on minor upgrades when you have one that's easily addressed like mp3 vs flac.
