I've been using AudioGrabber togther with Lame.exe and have been happy with it so far. I have Lame set to VBR (the 3rd from the highest setting) and have a minimum bitrate of 128. This was able to pass my stereo test, using a clip from a Pink Floyd song. Overall, it creates files around 160, but will spike as far up as 320 when needed.

Befire this, I was using the Xing encoder on CBR 192. Found that still created a few issues, and made bigger files.