I'll never believe statements like this without ABX results to back it up. Folks over at hydrogenaudio forums have done these tests in the past and among those experts iTunes 128kbps is indistinguishable from WAV for most folks. Up that to 160kbps and you'll cover 99.9% of the population. 320kbps is overkill when using AAC, I believe they found that AAC-128 was similar to the best VBR MP3 ~160 or even 192kbps
Unfortunately, not enough people do proper tests like double-blind abx. Also, the testing that is done is flawed. If you pick 10 'regular' people who are not audiophiles and test their listening skills, they wouldn't hear any difference from 128 to lossless, and I completely believe that. I'm always teaching people what to listen for. When I do, every single person can distinguish the difference easy as pie.
The issue is that they don't care. Truly, they enjoy the music for the lyrics or the melody or the bass line. They could care less about how 'good' those aspects sound in terms of sonic quality. They will even say this to me. However, when you do care, like I do, and if you have listening experience from being a musician or audio lover, you are more likely to know what to listen for, or at least to instinctively hear the differences.
I did a blind test with my fried using a macbook pro with an apogee duet and alesis m2k bi-amp studio monitor speakers, infinity alpha 50 speakers with a denon acr-990, high end sony earbud headphones as well as high end sony studio monitor headphones and basic apple headphones. Comparing random lossless music of every genre to 320aac in itunes. I correctly picked which was which in 'every' single instance. However, I will say that from 320 to lossless, sometime "I" wasn't positive "what" was different about it, but I could tell every single time that "something" wasn't right about the aac and picked it out correctly.
The best way I can describe the difference at higher quality lossy vs lossless is that the lossy compression takes away depth. For instance, when you listen to a few instruments in a room and you can hear "into" the room as if you hear the depth of the reverb and how "deep" the room sounds, with lossy compression you lose a bit more of this depth with every drop in bitrate.
Another example would be the space "between" instruments. if you had a few instruments sitting next to each other it is as if the space in between is harder to see, which in turn can make the instruments a little less "separate". The obvious different at medium to low quality lossless is simply the lack of high frequencies making the audio sound 'swishy' or muffled.
As for the percentage of the population that can 'easily' tell the different... I'm not sure. I highly doubt it is 1%, but I'm guessing it probably isn't much more than say 10-20%. Who knows.
As for audio quality vs mp3. It is scientifically and audibly twice the quality at the same given bitrate. So a 256kbps cbr mp3 would be roughy equivalent to a 128kbps aac file. There are many tests and studies done that show this. There are instances where one is better than the other depending on the audio material, but the average basic sonic quality is equivalent. The difference is primarily the 'way' they determine what aspects of the audio to eliminate.
In conclusion, even with inexpensive headphones such as apple's included earbuds, the difference ranges from 320aac being somewhat easy to discern from a CD (i won't go into 'higher' quality than cd comparison) to 256aac being easily apparent from a CD, 128aac being extremely apparent, all assuming you know what to listen for and/or instinctually listen for the aspects that an audiophile would be more likely to desire in the audio.
In no way should this be an insult to anyone who can't hear the differences. It simply is what it is. Everyone has a different purpose for listening to music. I focus almost completely on the sonic experience favoring artists that have incredible recordings and composition. Even with lyrics, my focus is always the music. Some people enjoy the "feel" of a song, whether it's a bootleg live recording or steely dan producing the album. Some people like the meaning of the lyrics more than the song itself. All of this is personal preference, and I think that's great if any song moves you in any way. For me personally, the higher bitrates allow me to hear more deeply into the music and experience it as it was intended.
In a perfect world, iPods would be 1TB and we wouldn't need any lossy. But I digress...