Most of my audio is in Flac format and I want to convert them to M4A @ 256 Kbps ABR for my iPhone 3GS.
I have 2 conversion programs that will do this fine.
Program one will result in a maximum bitrate of 292 Kbps, while program 2 will result in a maximum of only 266 Kbps.
Am I correct in assuming that the result with the higher max bitrate is the better of the 2 results and the one I should use? (both are 256 nominal)
You've posted to the iTunes Match forum, which your question does not appear to be related to. However I'll give a stab at an answer.
Bit-rate alone is not an indicator of how good or bad the music will sound on your iPhone. You should experiment and see which one sounds best to you and go with that process.
Another thing you might want to consider doing is to convert the FLAC files to ALAC (Apple Lossless), add them to iTunes, then use iTunes to down convert the ALAC files as you sync them to the iPhone. There are several options for bit-rates you can choose from.