The internet is a the world of MP3s. Due to our need for things to go smoother and faster we tend to sacrifice quality in order for us to get things now. This is evidenced in the compression of MP3 files on MySpace and the heavily compressed YouTube videos we all love to watch (and upload ourselves).
Since we want to reach a growing number of people, we don't want to run the risk of our target listener to get bored with loading a video or a song of ours. Regardless of how high the quality of your music sounds, the average listener on the internet doesn't really care if it's lossless WAV or highly compressed MP3s. Just like you, they want their music, and they want it now.
But that doesn't mean you should discard quality in other situations. Just because you upload 192kbps MP3s (or god forbid 128kbps) to the internet for mass listening doesn't mean you shouldn't push quality whenever you get the chance. I've had many situations where I've been handed CD playbacks to play for lead singers at a concert that sounded absolutely horrible coming through a big PA system.
By all means, if you have the chance to avert being handed CDs that are actually just burned MP3 files please do so. MP3 can sound exponentially worse coming through a big speaker system, so you should do everything in your power to get a correctly burned, quality CD. But how?
WAV and MP3 comparison
CDs sound better because the bit rate is higher and it isn't compressed as much. The bit rate for a typical 44.1kHz/16 bit CD is 1.411kbps. Compared to the former standard of a 128kbps you can see clear as day how much better a CD should therefore sound. The compression ratio from a CD to 128kbps MP3 is 11:1.
Let's put this in perspective. An MP3 sounds eleven times worse than its CD equivalent. So there is no wonder it sounds bad when played through your rocking PA system. A great PA is not going to help with reproducing frequencies that aren't there anymore.
What do I mean aren't there anymore?
By using complicated compression methods an MP3 is a stripped down version of a WAV file. Meaning that the frequencies are analyzed, some are discarded and are allowed to stay. And with a compression ratio of 11:1, it could be said that with every frequency allowed to stay, eleven are thrown away. Theoretically anyway, and to me that sounds pretty bad.
Burn CDs Correctly
Make sure that next time you are creating CDs, or are instructing an artist to burn a CD to be used for playback that there are actual WAV files being burned, not heavily compressed MP3s. Logic allows you to bounce directly to MP3 and many take this route automatically without thinking. When you are going to burn a track from your DAW make sure it is set at 44.1kHz WAV file at 16 bit. That's the correct settings for directly burning them to CD.
Sometimes people rip their CDs into iTunes using the default encoder, or choosing MP3 encoding in the preferences. Then they thoughtlessly burn these MP3s to disc again without thinking about the loss in quality they have created with encoding them in the first place. This is what happens sometimes when an artist gives you his playback. It's usually a burned copy of the master tracks that were ripped into the computer. Be wary of this. It won't sound good. Make sure they are giving you the best quality possible, if only for their own sake.
Also, when burning multiple tracks be sure to burn it at the lowest possible speed. The same artist I talked about above decided it would be a good idea to burn MP3s at the highest possible speed. Double trouble! I didn't realize until it was too late. Not only did the backing track sound sub-par, but the first two songs of the CD skipped due to the speed of the burning process. And to put things into perspective, who does the audience blame when a CD skips at a concert? Definitely not the artist...
Next time you are ripping your CDs, putting them on the internet or burning them to be played, keep in mind the various uses it will have. An MP3 on the internet is going to be fine, since that's the standard format there anyway. I listen to my 192kHz MP3s on iTunes when working since I just like to have a little background music when working.
But when I want to listen to music I try to listen to CD quality music (or vinyl even!), or rip my music at 320kHz, which is as close to CD quality as an MP3 can become. So although you can get away with a little less quality in some situation, please don't disregard it completely.