Just when you thought you knew everything about a topic, something new comes along to upset the apple cart. There are new techniques for sampling that violate the tenets of Nyquist. These new sensing techniques use random sampling of the signal, and the principle of sparsity.
Sparsity implies that while a signal may have sections or areas that require higher sampling, other areas of the signal do not. Most applications of these new techniques appear to be directed at imaging, where a scene may have complex areas and simple areas (sky, lake). Conventional wisdom would sample the image at a high rate to insure that the most complex portions of the scene would be captured with adequate resolution.
Now, getting back to the question about sound. A sound waveform may have sections with higher frequency components, and may also have sections without them. Using these new techniques it would theoretically be possible to sample at what would be an equivalent "128kbps" rate, but capture much higher resolution of the actual signal.
I have been trying (intentionally) to build the anticipation of just what I"m talking about. The techniques I am referring to are called "Compressive Sensing". They are quite new, I believe they have been developed in the past decade. They are based on statistical probability, not the basic "sample high enough to get everything" techniques of Nyquist, and therefore they have the ability to turn all of that conventional wisdom on it's head.
The technique was first developed at Rice university, and their website has as a wealth of information on the topic:
http://dsp.rice.edu/csHopefully my brief comments are accurate, I am no expert on the subject, but I have read some papers on it. Compressive Sensing (CS) does not actually provide the solution that Anand was asking about, but I felt it was worth mentioning here as new students in electrical engineering will be hearing about these new techniques that go beyond Nyquist.