Recently the RareWares published an open AAC / MP4 audio encoder listening test and now the results are ready for you to review.
What we can learn from the results is that the Apple QuickTime encoder, which is of higher quality than the codec used in iTunes, is the best of the pack. It is also quite clear that the free FAAC encoder still needs some work. The rest of the participants were quite even, which is partially suprising as Nero AAC is actually an updated version of the PsyTEL. One must also take into account that the test was conducted with 128kbps CBR (Constant BitRate) settings and the more efficient VBR (Variable BitRate) modes were not used.
Read the full test results and some commentary at RareWares.