This is where a difference between the codecs becomes more easily discernible. With files encoded at bit rates roughly equivalent to 128-130kbps, I found that the differences are obvious compared to the original WAV file - I was able to distinguish between them 100 per cent of the time. For me, 128kbps is not transparent.
However it's still hard to say whether any of the codecs is actually better than the other. It depends on the type music you're encoding and your own preferences, of course. And if you settled on one, you'd still probably come across circumstances under which you prefer a different codec to your 'favourite'. In my double blind tests, again I couldn't reliably identify which was the 'better' codec out of MP3 (-V 5 --vbr-new), AAC (iTunes 128kbps VBR), Ogg Vorbis (Foobar q4) and WMA (VBR 85 to 145kbps).
It's when you go below 128kbps that the strengths and weaknesses of the various codecs really begin to show. At 80kbps equivalent (or q1), for instance, Ogg Vorbis is much more listenable than WMA or MP3 at similar bit rates, and pretty darned close to the 128kbps equivalent offered by each codec's VBR modes as detailed above.
And at 64kbps, there's no competition. If you have absolutely no choice but to encode at low bit rates, in my test of the widely supported popular formats Ogg Vorbis beats the competition hands down. I tested using the double blind approach again and the samples I picked out as being better were, each and every time, Ogg Vorbis samples.
There are, of course, other codecs that rival Ogg Vorbis at these low bit rates. Nero's free command line HE-AAC encoder, for instance, performed even better than Ogg Vorbis in my 64kbps tests and is becoming increasingly widely supported in mobile phones - worth bearing in mind if you use your mobile phone to listen to music on the move, as many people do these days. Dedicated music player support, however, is still pretty scarce.
WMA Pro also gets very good write-ups and Microsoft claims better or equivalent performance than HE-AAC. My informal ABX tests confirmed it to be roughly equivalent at 64kbps to HE-AAC and an improvement over Ogg Vorbis again but, once more, hardware support here is limited. Windows Mobile-based smart phone owners will be able to take advantage of it, but hardly any mainstream music support the format.