I have been using LAME at 256-320 vbr for MP3 encoding. I have experimented with several encoders, and this seems to fair pretty well at higher rates - most of the time I can't tell the original from the encoding (Not that I am a 'golden ears' or anything, but as long as I can't hear the diff, I am happy :).

As far as the 18 kHz limit, yes you are correct that most people can't hear above that anyway... and I don't know whether or not I could hear the difference of a music track before and after a 18 kHz filtering.... but I have heard the effects of the 16 kHz filters often used at 128 or 192 and below in MP3 encoders, and that is usually quite noticable in A-B type testing (depending on the content). It is not unllsitenable or anything by far - but I want to avoid doing things along those lines if I have the choice.

For competition, it is also questionable as to whether or not a judge would hear the difference during subjective judging. But if the roll-off is too steep (more than 6 dB between 1/3 octaves) you will fail the objective part of the testing (RTA measurements)..... which was my immediate concern.