[theface07]

Lots of interesting points here. It's obvious that there is a difference of opinion as to whether mp3s are as bad as claimed or if they sound much different than wav files.

I don't think a lot of the arguments are being objective enough though. Personal differences/opinions on music are subjective and shouldn't be a factor. I think that side should be kept out of a "quality" argument between wav & mp3. Many physical and physiological factors come into play in such a debate.

Firstly, not everyone has the same hearing. Yes, the human hearing range is about 20-20000Hz but that doesn't mean everyone can hear 20Khz or identify it! It's important to remember that mp3 files alter mostly high frequency content.
Some people are born with limited hearing and some develop it through their life through regular exposure over a long period of time (say 40 yrs.) or short term exposure to very high sound levels. This will definitely affect your ability to determine the different between an mp3 and a wav file, not just because your hearing is damaged or limited but because mp3 files alter and eliminate mostly high range frequencies, which are the first to go!
Secondly, as much as I am a firm advocate of keeping mp3s and other lossy audio out of the trading circles (unless it is the best sounding source available, such as the mc5 torrent that got banned recently.. ), with bootleg recordings, especially older audience recordings with a limited source recording range, the higher frequencies are not recording and are usually just noise because of storage, transfers and/or tape noise from source.
In these cases, depending on how extreme, it will become very difficult and sometimes impossible to tell the difference between an mp3 and a wav file.
Finally, and to a lesser degree, the original recording, mix and master quality will have an effect on how easy/hard it is to distinguish an mp3 file from a wav file. I noticed this while listening to recordings transferred from badly mastered cds, such as a lot of first issues of older analog releases on disc. A bad quality master will make an mp3 same equally worse. Think of cymbal sounds and other high frequency instruments. A lot of times you will get that garbled digital sound when a cymbal is hit (especially hi-hats), this is because it has been compressed, cut down, and altered by mp3 compression. That's why a bass drum usually sounds pretty non-garbled, even in low bitrate mp3s. It's a very low range instrument and doesn't get altered. Nowadays, popular music is so garbled after going through the processing stage that it doesn't really mater what you do with it! People are used to listening to mp3s so the engineers master the recordings to sound like mp3s to begin with! It's sad to think that's what has happened but it's not debatable, the compression and processing levels have been increasing dramatically since the 60's. Classical scholars (who are really the real audiophiles) used to get upset by popular music's lack of dynamic in the 50's & 60's! Based on a comparison of dynamic range, classic rock will soon be considered classical music!
That's my take on all this anyways. Listen to what you want to, just don't trade one thing and call it another.