We are getting closer, but still not quite agreeing.
You said, "you don't need to restore. If you removed the 128 MP3 in iTunes, just sync. It will remove the MP3 version and put the new version on."
Assume there is no 128 MP3 song in iTunes on the Mac to delete. The 128 MP3 version on the iPhone came from downconverting during a previous download.
"Or simply make the change, stop the sync and restart the sync.
Or let it complete the sync then resync it."
Your second statement is not consistent with your first, which was, "I assume an iTunes sync would not replace the 128 MP3 iPhone versions with 256 ACC ones."
Are you suggesting I go through the files on the iPhone, one by one, and delete all that have compression quality less than 256 ACC? That would be tedious. I just plugged in my iPhone, selected Music, and then tried to sort the Kind column by clicking on "Kind". It did not sort them by "Kind". It starts listing ACC, then lists MPEG, then lists ACC again. As far as I can tell I can only sort on Genres, Artists, and Albums. Even if I could sort on Kind, it would not sort on Bitrate, so I could not group the 256 ACC files.
So I state again, there is no non-tedious method to upgrade the 128 MP3 files on the iPhone, except for deleting and syncing the all of the music on the iPhone.