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The higher the bit-rate the more clearer sounding file you have. The more bitrates mean you can pack more data into the file. CD's are encoded with 128k which is suitable for most equipment. I prefer to encode my files at 192k because disk space is cheap and I like to get high-end stero equipment. I think anything above 192k requires you to be an audiophile. You're right, there is only a subtle difference between 128k and 192k but it is still hearable on my equipment. I'm sure all the audiophiles on the board could give you a better explanation. Mind you this only applies to files that are compressed at a constant bitrate. If you are worried about disk space and still want to maintain a descent quality I would suggest you encode your files at a variable bit rate (VBR). The encoding algorithm will look at your audio file and determine how much information to get rid of and how much information to keep to still maintain a good sounding audio file. The downside of VBR is that older MP3 players can't play them. 80k is a little bit too low for my taste but it it works for you, it works for you. If in doubt use a VBR encoding scheme and you'll get the best of both worlds.
Don't know which version of Nero you are using but with Nero 6 you have the option to save an audio file as an MP4. It produces significantly smaller file sizes but you can't play it back on your MP3 player only on a software player. Check to make sure how you are saving the file. Maybe you are getting significantly smaller file sizes because you are saving them as MP4s.
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