Encoder settings

Bitrate

A file's bitrate is how many bits per second are used to represent the audio. So a 128 kbps file uses 128,000 bits per second to encode an audio signal. The more bits used, the less information is discarded to create a compressed file.

Bitrate therefore determines the size of a file. Here are a couple of examples at various bitrates:

16bit 44.1KHz Stereo
File Type         Uncompressed         320kps             192kps
5 Min Track             50 MB           11 MB             7 MB
15 Min Track            150 MB          33 MB             21 MB
80 Min Mixtape          700 MB          183 MB            110 MB

Variable Bitrate
Variable bitrate (VBR) is a way of saving disk space. The bitrate setting chosen is used as the maximum bitrate to be used, and when the encoding algorithm decides it can get away with using less bits to accurately represent a part of the audio, it does. Thus the bitrate changes over the length of the file, hence the term variable bitrate. Variable bitrate files can take slightly more CPU to decode than constant bitrate files, due to the changing amount of bits.
Constant Bitrate
The meaning of constant bitrate or CBR is obvious. The same number of bits are used to encode every second of audio.

Wikipedia article on bitrate

Joint Stereo

Joint stereo is a technique where instead of encoding the left and right channels separately, the sum and difference of both are encoded instead. Since both sides will tend to be very similar, the difference will not require a lot of data, and thus the size of the file is smaller than 'normal' stereo. This means more of the bits can be used for the 'important' information, and thus the quality will tend to be improved. It should be noted that some experts think joint stereo techniques can impart artifacts on the audio, but in general joint stereo is a good thing.

Joint Stereo: The Myths and The Realities

Some recommended starting points

If  want the best quality you can, the standard is 320 kbps CBR Joint Stereo.

If you find that you don't have enough room to store all your music at that quality, a good compromise would be 224 kbps VBR joint stereo, although it is worth 'future proofing' your music collection by keeping the file quality as high as possible, so VBR is recommended only as a last resort.

It seems like a well established fact that you can't get away with bitrates lower than 192 kbps in a performance setting.

Beyond those starting points, it's up to you to listen to your encodings, and see what you like or not!

Good times :-)