I know I'm a bit late to the show, but after skimming over all the graphs and articles and what-nots I decided to do a small test of my own (now that I finally own a semi-decent pair of cans and a sound card).
A FLAC file was taken and converted into the highest bit-rates available in other common'ish formats - 320k MP3, 192k WMA, 155k AAC and 1536k WAV. Keep in mind that bit-rates are largely irrelevant after 192kbps onwards, after that it's all up to how the format handles things.
The conversion program used was Total Audio Converter v3.0.88, one of the best as far as home use goes (sorry I don't own a studio powered by Apple computers :P).
Itoshigo Yo by Rurutia isn't exactly a mind-blowing orchestral piece but it represents the average music file for me. I focused on individual things like the crispness of the guitar strumming and depth/dynamics of the Rurutia's voice.
After literally an hour of listening to that song in different formats, I concluded this:
1) FLAC = WMA = AAC = WAV
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2) MP3
> There was less than 1-2% difference (if my ears could even pick that out) between the FLAC, WMA, AAC and WAV formats, all sounded extremely alike.
> With 320k MP3 I immediately noticed the horribly painful difference - the crisp details (e.g. strumming) were GONE, the mids sounded muddier.
> Since Itoshigo Yo doesn't really do justice to bass, I used "Kill Everybody" by Skrillex (love him or hate him!) to test the bass loss in MP3 for those bass-heads out there. Holy mother of cows, the bass lost almost all it's depth and cleanliness and turned into what sounded like a fat guy bouncing in a muddy puddle - mind you it was still as "bassy" but nowhere near as clean and detailed as the other formats.
Here's the kicker - the file sizes:
WMA is the clear winner here when it comes to file-compression vs quality, followed closely AAC. Both sound vastly superior to MP3 while being smaller!
So where does that leave MP3? Nowhere. People say "oh it greatly reduces file size while sounding nearly as good!". Well, if you're using a standard MP3 player with a shitty sound chip (e.g. iPod) coupled with standard shitty earphones/headphones, yes the difference becomes far less evident - but it's still there, it's still noticeable.
Mind you that high-quality MP3 players have been around for a while now, stuff like Cowon and Kenwood's better-sounding models paired with some decent IEM's leave your typical mp3 players in the dust (buying a Cowon i9 to replace my iPod Classic!).
WMA and AAC literally beat the SHIT out of MP3 in in every way (compression and quality). All MP3 players can play WMA files, it's been around for a very long time. iTunes converts WMA into AAC and both sound exactly the same i.e. excellent, so don't give me that "cuz ppl wanna listen on portable devices" reason.
So why did MP3 become the most favored format around the world?
My guess is probably the same reason QWERTY became the most popular keyboard layout.