I also have found the lossless or high bitrate matters. For the longest time I thought the stereo in my SR was not that great, but I recently tried a free Spotify account and set it to maximum quality for all playback scenarios. It's far, far superior to the Tesla Slacker/Streaming, and shows just how bad their stream is. So much so that I disabled the Slacker channel in the UI, it's terrible, even if free.
I can easily hear the difference between 128k encoded MP3 and lossless. I suspect the Slacker channel might even be lower than 128k. I can no longer hear any difference once we get to 192k VBR encoding. But nowadays media is so cheap I just put wav files on my USB drive.
I'd recommend avoiding the Tesla streaming channel except maybe for spoken word. It makes your stereo sound much worse than it is.