Pandora on the Web plays 64k AAC+ for free listeners and 192kbps for Pandora One subscribers. All in-home devices play 128kbps audio, and mobile devices receive a variety of different rates depending on the capability of the device and the network they are on, but never more than 64k AAC+.
If you're listening to Pandora in your browser:
Once you're signed into your account, click your email address in the upper right corner, click Settings and select Audio Quality.
If you're listening with the Desktop Application:
Click on the menu arrow between the two Thumbs icons and select Preferences. Audio quality preferences are under Music Streaming Quality.