Actually it is pretty well-known. One of my co-workers used to have a conclusive proof by having a classical music piece, with on the left channel the piece encoded in MP3, and the right channel "unencoded".
If you listen with headphones, the difference in quality is astonishing.
Ofcourse some types of music suffers more from this loss of quality.

I don't agree. It depends on the compression ratio, for one thing. While it is true that compression is lossy -- the article mentions DVD as being some kind of quality standard, whereas it is actually highly compressed -- it is also true that a standard audio stream contains a lot of information you simply can't hear, so an intelligent compression scheme is viable.

Since dime-store DACs are quite good now, the real limiters in nearly any stereo system are quality of the speakers and amplifier. I am quite happy beaming high quality .mp3's to my nice integrated amp through Apple's cheap little Airport Express. Although I haven't tested, I would doubt that I could tell the difference between that and my CD player with fancy Burr-Brown DACs.

The real problem, in my opinion, is the number of people content to listen to their iPod's mic level output through crappy clock radios, Bose wave nonsense and mediocre headphones.

This co-worker was the head honcho of MPEG 2 encoding and decoding in our company (which participated in the MPEG 2 specs foundation), not exactly an audio phile. :-)
With the right music, he always chose Bach's Kunst der Fuge, you can hear easily hear the compression artifacts of MP3, though it's somewhat harder at say 256Kbit/s. 128Kbit/s (the default bit rate by most encoders) is pretty "wack", unless you listen in a noisy room, or with crappy hardware.
Wikipedia has a nice and brief overview of MP3. Of particular note: The well-known fact that the MP3 inventors used "Tom's Diner" to tune their compression model.
(For classical music I tend to encode higher than 192Kbit/s, which offers a nice trade-off between size and quality.)