Just to throw in my 0.01 US cents worth,

The thing to remember is that MPEG was designed as a streaming protocol. A stream of data comes off your DVD player and gets decoded on the fly into video and sound; no need to decompress it beforehand. Likewise, you can use this on, say, a video or audio link, by compressing as you read the signal on one side, sending the compressed signal, and then decoding it on the fly at the other end.

It's easier to make a player that will always compress using a certain bit rate, because that implies a certain size of the DCT matrices and so forth. 128kbit is the bit rate that gives you 'CD Quality' over pretty much any signal. Granted, people are learning what the artifacts of MP3 compression sound like and are identifying them in these former CD Quality streams, but the standard isn't perfect. And also consider that it's easier to allocate a fixed amount of bandwidth in a network to that stream than it is to hope that your encoder isn't going to throw a huge spike of data at you at just the same time as the rest of your network is saturated.

It also takes much longer - usually twice the time - to compress a VBR file due to the fact that the compressor has to go through its encode loop a number of times to see which encoding is best. It's not a process like whittling down a square peg to go in a round hole - trim a bit off here and a bit off there until you get to the quality you want. It's more like trying to find the square hole in a large collection of differently shaped holes - in the encoder's terms if you're throwing more information away it sometimes changes your original DCT parameters, which are the basis for all the subsequent steps.

Not that I'm an expert in how the MPEG layer 3 compression actually works, but I think I understand the basics. The uptical pracshot is that LAME usually takes about twice the time (on my machine, a Celeron running at 525MHz) to compress a VBR file as a CBR file of roughly the same bitrate.

Save the whales. Feed the hungry. Free the mallocs.