Quote:
... better quality for lower bitrates...

Probably not what you want to hear, but this is already done with Ogg Vorbis. I have converted all of my music to OGG at half the bitrate my MP3s were, and the sound quality is equal if not better, both in-car and at home.

Of course this requires version 3 of the player software. I myself have been using 3alpha8 for months with no major problems.