Higher quality music files take up more space on your hard drive. For example, a 3 minute track recorded as 44 Kbps RealAudio takes up only 0.9MB; the same track at 96 Kbps takes 2.1MB.
A recording quality of 128 Kbps is the industry standard for MP3 recordings, and is very near CD quality; most people won't notice a significant difference between files recorded at 128 Kbps and those recorded at 320 Kbps. When choosing your bit-rate, consider the tradeoff between sound quality and file size.