OK, just for fun I’d post this little topic about audio formats

Lets start with the basics, Loosy codes
mp3
What uses it:
almost everything
How it works:
chops off the high frequences
What settings to use:
I wouldn’t use anything below 160 (I usually use 160)

mp3 (VBR)
What uses it:
almost as much as mp3
How it works:
same as mp3 but the bit rate varies depending of the content
What settings to use:
look at mp3

ATRAC
What uses it:
MiniDisk players and other sony stuff
How it works:
it trys to keep the high end and compress the more quiet sounds
What settings to use:
I prefer 132 atrac3 but more experimentation is needed

Dolby AC-3
What uses it:
DVD’s and other surround sound stuff
How it works:
don’t know
What settings to use:
I’ll get back to you on that one

Ogg
What uses it:
winamp and some other computer players. I’ve also come across one mp3 player that also supported it
How it works:
see ATRAC
What settings to use:
i prefer 5 or better, but if your sending someone a track over msn, 4 will do just fine.

WMA
What uses it:
windows media player, and other mp3 players. Although once in wma it’s almost impossiable to convert back to something else
How it works:
no one really knows, but most likely like VBR mp3
What settings to use:
just don’t use it, it sucks ass

Lossless Audio Codes
There are a ton out there so I’ll cover the main ones.
All these codes work the same way, they are like specially made zip files

FLAC
What uses it:
almost every bootleg torrent site, xACT (mac), play (mac), cog(mac), winamp, the traders little helper. I have also seen one mp3 player with this support, but have never since seen it.
What settings to use:
6, or 8 I perfer 8 just because of it’s smaller file size.

SHN
What uses it:
lots of bootleg sites, xACT (mac), cog (mac), winamp, traders helper.
What settings to use:
there are no settings
Draw backs: can’t skip to a part in the file, you have to listen to the whole thing through

APE (Monkeys audio)
What uses it:
some bootleg sites, don’t know what plays it
What settings to use: ?

How about AAC? Also, is their really an advantage to using optical audio instead of the standard connectors for 5.1 surround?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I'll get back to you on AAC, but there are advantages to using fiber optics. One is that unlike normal wires they offer no resistance and will not change the audio signal (although I doubt that anyone would notice the difference). The second advantage is that light cannot get electrical interference, aka hum or cell phone. (although the wires to your speakers can). And the final good thing is that it's already digital so there is no analog to digital to analog to digital again. That's the only really good reason to use them.

I've got a free one, but I'm using it. :P
Why not just get a 7.1?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

So far what I hear with AAC on the custom setting (always make sure it's Stereo,  44.100KHz, And Variable bit rate) is similar to non-VBR for mp3. I wouldn't use anything below 160 or 192. When I fist imported a song in at 256 it sounded a bit different. Then a bit lower I could tell it sounded a bit "fragile" but it wasn't until 128 that I actually heard it.

Just a correction i noticed: WMA can be converted out of as long as it's not protected.