you can always rule of out the effects of placebo/expectation bias by using foobar2000 and the foo_abx component. you can read this for more info:
http://www.hydrogenaudio.org/forums/index.php?showtopic=16295
don't feel you have to present any results on my account. i just don't care. i have rubbish hearing and a crap stereo but i still buy CDs and rip to flac. i just want flexibility for whatever comes further on down the line.
i'll still buy lossy files from the amazon mp3 store and even itunes but that's only when i want single tracks or they are digital exclusives you can't buy on CD.
that's not likely in this day and age. you can rip around 3000 CDs to flac per 1TB of disk space - but you do need to consider doubling up when thinking about backups.
i wouldn't sink to 128kbps but there really is nothing wrong with 20 quid devices. you can get a low capacity sansa clip and they are amazing players for the money. for one thing they support rockbox and proper gapless playback. i've read about so called "audiophile" devices which cost hundreds of dollars that pop and click on track transitions. they have no concept of gapless. the only reason audiophools think this is acceptable is because they cost so much.