I use v0 MP3s on my portable stuff. I don't run good enough gear to really pick apart the differences between it and my good lossless copies and it's significantly smaller. I'm also usually doing something other than actually listening when using those setups, so I'm not too focused on detail loss anyway.
On my home setup, where I'm stationary, and usually listening for the sake of actually listening, I can definitely hear the differences between lossy and lossless formats on my good gear. On cheaper gear, I can tell, but it's much more subtle. 320k is pretty solid if the gear isn't exactly great at pulling out any additional content, but it's existence is mostly for the sake of space saving, not quality. And really, it's not like FLAC is particularly large given modern storage space. FLAC is downright tiny compared to uncompressed WAV. And if you're after space, v0 VBR is pretty much indistinguishable from 320k CBR to my ears, in a smaller package, and unless you're using really old gear, pretty much everything handles VBR just fine.
Lossless is better than lossy formats. Period. The big reason behind this assertion, is that you can resample a lossless file whenever you'd like, between other lossless formats, down to a lossy format, whatever, and the only losses you'd ever see, are those that occur is making it a lossy format. Lossy formats have already thrown out data. There's no getting it back, and any further resampling will throw out even more (lossy to lossy) or just make the file bigger for no reason (lossy to lossless).
The music itself is important though. If you listen to crap masters, you won't be able to tell any difference anyway. Good masters definitely lose a lot the more you compress them. If 320k MP3s sound better than lossless, you're probably too used to compressed music, and you're going to prefer the compression and artifacts of it. You may not like hearing something properly. You're not alone here, and frankly that's annoying, as it allows producers to get lazier in producing lower quality things with the limits of MP3 being their target, or worse, trying to achieve that compressed sound. We have people being raised on low quality MP3s (iTunes is a pitiful 128k) to blame for this, as they're overly used to it. I guess it's good for your wallet though, as you have no reason to pursue better gear to better reproduce something, since sticking with MP3 leaves you with something anything is capable of.