When doing MP3 encoding, MPEG I, II and II.5 have the following meanings:
- MPEG I refers to MPEG-1 Audio Layer 3 as defined by ISO/IEC 11172-3 (MPEG-1 Layer 3) which offers bit rates ranging from 32 kbps to 320 kbps and sample frequencies from 32 to 48 khz
- MPEG II refers to a set of extensions to ISO/IEC 11172-3 defined in ISO/IEC 13818-3 (MPEG-2 Layer 3). These extensions provided additional bit rates and sample frequencies including bit rates as low as 8kbps and sample frequencies as low as 16 khz. These extensions are completely backward comparable with MPEG-1 but are geared toward low-bit rate audio.
- MPEG II.5 refers to an additional set of extensions to add additional sample frequencies, however these are unofficial extensions and not defined by the ISO/IEC. MPEG-2.5 offers sample frequencies down to 11 khz.
Unless you have a specific need for low bitrates or sample frequencies I would stick with the MPEG-1 offerings, they were designed for more general use. Here is an old blog post which discusses some optimal CDex settings