Well, here's my bit.
The whole thread started about iso/mp3 vs. bin/cue and now is degenerating into a flame war over how good/bad mp3 files really are.
Let me cover the bases one by one.
Yes, MP3 is lossy. No, MP3 is never CD quality. That said, done right, it's still better than even the highest-fidelity tapes and vinyl records of yore used to be. A lot of ppl, myself included, at least still have tapes and enjoy listening to them and they're good quality.
Also, a direct comparison between CD audio and any compressed version of it is pointless when it comes to games, for two reasons:
1. When you download an iso/mp3, burn it and listen to the audio, you never have the advantage of listening to the ORIGINAL audio vs. what's on your burned CD. What matters to *you* is that it still sounds pleasant and listenable. Of course a *lot* more people will say they can hear compression artefacts if they have the benefit of comparison.
2. Often, the music will be drowned by other sounds during a gaming session, you won't have time to appreciate the nuances of the music because you're busy playing a game. That further dimishes the real importance of high-quality rips.
A thing to warbling MP3s... a lot of it depends on how and with which CD drive a game (and its audio) is ripped... I have seen - rather, heard - BIN/CUE images on Ralos' FTP that sounded terrible despite being a 1:1 rip. For anyone who wants to see for himself, download the bin/cue of Tryrush Deppy and listen to the last couple tracks. (I vote for it to be removed, actually...but that's another story.)
My personal experience is that the biggest audible difference between CD tracks and their MP3 counterparts isn't in clarity vs. muddiness or in frequency response ... it's in STEREO IMAGING. At average bitrates (128kbps), all encoders will by default devote most of the available bitrate to encoding a MONOPHONIC signal and use the remainder to encode the DIFFERENCE between the left and right channels. This is known as joint stereo encoding and seems to be done rather poorly across the board... In fact I find that if I use higher bitrates (upward of 160kbps) and true stereo encoding (half the bitrate for each channel separately), MP3s sound much more alive and truer to the original.
The fact remains of course that MP3 is lossy and is meant to be a compromise, which it is. That said, game audio just doesn't have the same importance to me that an audio CD (album, soundtrack) has. Heck, I've come across CDs of either kind that have been poorly mastered - the original Thunderforce V disc, for example, has very loud audio and slight distortions due to overload...
I, for one, vote for iso/mp3... so long as the ISO track is the correct length (almost always it isn't) and the mp3 was encoded with care and a minimum of 128kbps...
I even think that 320kbps is almost overkill, for anyone who isn't happy with even that bitrate should stick with the uncompressed audio to begin with...
Oh, for the record!! I'm deaf since birth, only hear low frequencies on the left hear (but the full range on the right)... I always use headphones, I have a pair from audiotechnica which can play loud without distortions, perfect for me... I am an excellent listener, at least on the right side
, and even have a good sense for stereophonic hearing... I dare say that I pick up more details than the average person despite my deafness...