Version: MPEG 1 Layer III is default. Use the other MPEG versions only if you need a very low bitrate or some extraordinary sampling frequencies for resampling the input files.

Mode: Stereo is default and the best selection in most cases. Use Joint Stereo only if you are sure that the input files have nearly equal stereo channels.

use VBR: enable this if you want to use VBR (Variable Bitrate) instead of CBR (Constant Bitrate).

resample Input: resample your input files to the desired frequency. You also should enable this option if you want to encode with low bitrate and KEEP this frequency.

Note: VBR MP3s are often larger than CBR MP3s but they sound a lot better 'cause Lame will use high and low bitrates to achieve the best results.