You don't have to use .wav. You can use .aiff too.
Disk space is cheap. I say go with 256k mp3 or don't bother to compress at all if you have the space. 192 AAC is sounds very very good to me, almost the same as uncompressed, but Live doesn't play AAC.
There's something funny that happens with 128, or even 192 mp3s. While the difference isn't obvious, there's something going on with the highs and on a good system, the listening experience suffers.
It kind of wears on me after listening to it after awhile. I think even casual listeners in a club can tell there is something different even though they might not say anything, of course.
It's kind of like if you would watch a TV with the pixels all blown up for a few hours. Your eyes would kind of hurt after awhile trying to focus on something that will never totally focus.