iTunes Match on your phone will likely be a mix of tracks that matched and those that had to be uploaded. Those that match will be available to you as 256kbps, but - if those songs are already on your iPhone, that's what should play. The 265kps versions aren't automatically downloaded to replace duplicates on the phone. You'd have to delete the local copies and then start playing a cloud version (or download it manually).
Songs that are uploaded are available to your iPhone in the same format as the original - that is with the exception of certain file types that Match allows iTunes to transcode into a 256kps AAC temp file, which is then uploaded.
You control what tracks are loaded onto your iPhone from the cloud. You will see all of the available tracks with a cloud download icon (an arrow in a cloud), but unless you play a song, or you decide to manually download it (scroll to the bottom of an album track list and you'll see "download all" for instance). it is simply there in the list for you to select whenever you want it.
Finally, you will be able to see what is on your phone vs. what is on the phone plus available in the cloud by toggling a setting in your music app.
Here is a link to some handy Apple docs. on iTunes Match, including one that will explain what happens to certain file types iTunes Match might encounter.