Itunes is one of the absolute worst mp3 players in terms of sound quality, so no wonder.... I can recommend XMPlay!
XMPlay is so great they don't even tell you what operating system it works on.
Looking over the site it appears to be windows only, so for us mac guys itunes kicks its butt as it at least works on my computer.
As for sound quality, I am one of those people who can tell the difference between mp3s and a CD, even at higher bit rates. Mp3s sound more distorted and have a flangy high end compared to CDs, anything below 256k is pretty much unlistenable to me, unless itís just dialog which for some reason I can listen to even at very low bit rates.
Having said that, most people just don't care about music all that much, even when they can hear a difference. For them, itís all about convenience, sound quality takes a back seat. I think high end audio only became important because it became for a brief while a status symbol.