Good MP3 quality is often achieved with VBR settings (i.e. variable bit rate), as it tries to spend more bits on tricky parts and less bits on parts that are not audible anyway.
I would go for minimum bitrate of 160kbps and a maximum of 320kbps. More than that is unnecesseray - you are not likely to hear a difference to the original.
As for the quality setting, always choose "highest" (i.e. 0). This will make encoding a bit slower, but the quality a lot better.
Stereo mode should be "normal" stereo, because there is some discussion on whether "joint stereo" is actually stereo or introduces errors.
Lame is a very good codec. Undeniably, the original Fraunhofer MP3 codec is great, too - but it costs, so stick to Lame, it's really good. But maybe if you're looking for quality, you should encode the files in MPEG-4 AAC (m4a, mp4), since it's a tad better than MP3.