VBR

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VBR = Variable Bitrate

In VBR coding, the user chooses the desired quality level. Then the encoder tries to maintain the selected quality during the whole stream by choosing the optimal amount of data to represent each frame of music. The main advantage is that the user is able to specify the quality level that he wants to reach, but the inconvenient is that the final file size is quite unpredictable.

Most modern encoders are able to encode to VBR. Including (but not limited to) MP3 (specially the LAME encoder), AAC, Ogg Vorbis, Musepack, WMA, etc.

Some codecs limited to CBR include AC3 (in theory it can encode to VBR, but no high quality encoder offers that feature), DTS (same thing as AC3, no publicly available VBR encoder), Real Audio and ATRAC3.

All lossless codecs are, by nature, VBR.