Its like video encoding, depending on the kbps biterate, pixel resolution, and encoding options you can achieve near DVD quality with a much smaller size with MPEG4 compression, to the point you could barely tell any difference.
Same with MP3 compression, depending on the biterate and freq, you can acheive near CD quality that few human ears and Hi-Fi stereos would be able to tell any difference. And since we are talking about car audio where the enviromantal noise contamination is so high, a commom 192kbps and 44Hz MP3 will sound no different that a CD-audio if its encoded correctly. Not to mention that some CD's you buy at the store are horribly recorded anyway. I have MP3's that sound notioceably better than original CD's.

So for a "car" audio specially, you won't tell much difference with MP3, if they are correctly encoded that is.

And even more so with factory offered systems, you may get better sound with 320kbps MP3's on some cleanly amplified Focal, Polk, Boston Acustics, etc speakers than with some normal Cd's and the Bose system.