In my experience I will hear a shimmering effect that sounds like a tremolo where the volume of the hi-hats and other cymbals are fluctuating. It also causes the overall sound of cymbal crashes to be mushier and less distinct. In addition I've noticed an effect where certain sounds such as the attack of high-gain guitar is stretched and doesn't sound consistent throughout a song. It seems like these artifacts are most noticeable in higher frequency ranges or perhaps transients.

Audio has its own equivalent. It's not noise, it's more of a gargly quality. You can hear it very clearly at more extreme compression settings.

The overtone movements become disassociated and start splitting up into disconnected sine wave blocks. Transients also become softened.

With MP3s this is obvious at the high end, while lows/mids sound passable. The compression algorithm has more frequency bins at the high end, so the damage is more obvious there.

There's also a loss of low-level detail. Reverb tails lose definition, and the music loses front-to-back depth.

Which headphones/speakers would you recommend/do you use?

There's something about the really low tones that simply... changes at lower bit-rates. High-frequency tones are somehow clearer when uncompressed. It feels like the tones are right, but the waveforms distorted. Your rippling lake MPEG analogy is pretty much spot on.

That being said, age, tinnitus and amazing progress within the audio compression sciences have made it more difficult for me to separate uncompressed WAV and 320 kbps MP3, though the 320 kbps files in the article had noticable artifacts in most cases.