Im doing some backups, and im a pretty big stickler when it comes to quality. However, i honestly cant tell the difference between a "high quality" MP3 versus the audio coming off of the cd. That said, am i missing something?
How big of a difference in quality is there that you can actually hear?

Nope, you're quite normal. The whole point of high bitrate lossy encoding is that it does sound the same to you as the source while being a lot smaller.

It's entirely subjective that's why you might want to perform an ABX test, etc. Most perceptual codecs reach transparency at certain level. That level is different for a lot of people although I find for most encoding -q 5 with Vorbis for example to suit me quite well ;-D. -q 2 if I really need the storage space or plan on streaming, etc.