I encode with provided software from devices and LAME. I always use MP3. Constant bitrate, high quality.
I use 128kbps to 320 kbps, depending upon application and music type. The more high freqs, the higher the bitrate should be.
Depends on encoder too. Some will give nasty sounds at 128kbps and some will be ok, but slightly "muffled".
For mp3 players using solid state memory I go for 128kbps.
For mp3/cd and HD players I usually go for 256kbps.
The lower the bitrate, the better the battery life will be, in most cases.
But sound is sound, and I want good sound. So 192kbps or better for me. Preferably 256kbps or 320kbps.