For the highest quality, I would go with CBR. Constant Bit Rate means the bit rate is a constant for the whole song. I would recommend the highest setting (320 kbps). Variable means the bit rate changes (varies) throughout the song. This setting is best if you really want the smallest file and are concerned about space.
Still the difference is very minimal (sound wise) and you probably will not hear a difference. Unless you choose 160 kbps vs 320 kbps, then you could hear a difference.
If you aren't concerned with hard drive space, go with the CBR at 320 kbps. It will still be a small file and you will get the best possible lossy overall.
Hope this helps