I'm a bit of an audio geek. What sets me off though is not digital compression (although I'm sure you lose some fidelity, I rarely/never notice any loss with 256kbps mp4s). What is really awful is excessive dynamic compression in modern CDs themselves - and it's far worse than digital compression. Music simply loses its punch. It can be hard to do an apples to apples comparison here, but if you compare an older album (Beatles albums come to mind) and a "remastered" version, one of the differences will typically be greater dynamic compression in the remaster.

Some resources on the topic: http://www.turnmeup.org/ Some examples: http://www.youtube.com/watch?v=3Gmex_4hreQ http://mastering-media.blogspot.com/2008/09/metallica-death-...