Some of the most used formats in digital audio are: wave (.wav), MP3 (.mp3), RealAudio (.ra), Windows Media (.wma), and, last but not least, Vorbis (.ogg). Each format has its particular strengths and specific uses. Wave and MP3 files are the two kinds of files generally involved in creating custom CDs. When you convert analog sound to digital by recording music with your computer, the resulting file will be in wave (.wav) format.

Wave is the standard form for uncompressed audio on a PC. Since a wave file is uncompressed data - as close a copy to the original analog data as possible - it is therefore much larger than the same file would be in a compressed format such as mp3 or RealAudio. Audio CDs store their audio in, essentially, the wave format. Your audio will need to be in this format in order to be edited using a wave editor, or burned to an audio CD that will play in your home stereo.

MP3 is a popular compressed audio format widely used to transfer music over the Internet. MP3s are created by taking wave audio data and processing it with a special algorithm. This algorithm removes parts of the audio that theoretically cannot be detected with the human ear; in actuality, there will be some degradation of quality, but this depends on the quality (bitrate) with which you choose to encode the file.

The net result is an MP3 file which is vastly smaller than the original wave file, but sounds very nearly as good. As an example of the huge size different between a wave file and an MP3, a three minute song will take up 30 Mb as a wave file, but only between 2 and 7 Mb as an MP3 (depending on the bitrate you choose). This explains why MP3 files are so popular for trading music on the Internet.

RealAudio is a streaming audio format often used by Internet radio stations and for posting sound files on websites. RealAudio files are smaller even than MP3 files - around 500 Kb a song - but are of lower quality if compressed enough to play over a slow connection (such as a 56 kbps modem).

Windows Media Audio is a format similar to MP3. This is essentially a competing format created by Microsoft and used primarily in Windows Media Player and other compatible programs. Microsoft claims that Windows Media files are even better than MP3 files, but MP3 files are still much more prevalent on the Internet.

Vorbis is considered to be one of the highest quality audio codecs in use today. It has a variable bit rate, at different quality settings. Vorbis produces smaller files than most other codecs at equivalent quality, and it is patent free.

Vorbis is an open and free audio compression (codec) project from the Xiph.org Foundation, started following a September 1998 letter from Fraunhofer Gesellschaft announcing plans to charge licensing fees for the MP3 format.

The Ogg Vorbis format has proved popular among open source communities; they argue that its higher fidelity and completely free nature make it a natural replacement for the entrenched MP3 format. However, MP3 has been widely used since the mid-1990s and, as of 2006, is still the most prevalent lossy audio format.

• Further in the topic

Many other lossy audio codecs exist, including:

• MPEG-4 AAC, used by LiquidAudio and Apple Computer's iTunes Music Store
• AC-3, used in Dolby Digital and one of the authorized audio formats for DVD
• ATRAC, used in Sony's Minidisc
• MP2, MPEG-1/2 Audio Layer 2, MP3's predecessor
• mp3PRO from Thomson Multimedia combining MP3 with SBR
• MPC, also known as Musepack (formerly MP+), a derivative of MP2
• QDesign, used in QuickTime at high bitrates
• AMR-WB+ Enhanced Adaptive Multi Rate WideBand codec, optimized for cellular and other limited bandwidth use

Some listening-based, some more technical tests have attempted to find the best quality lossy audio codecs at certain bitrates. The tests linked here appear to show that: at 128 kbit/s, Ogg Vorbis and MPC performed better than other codecs. At 64 kbit/s, HE-AAC and mp3PRO performed better than other codecs. At higher bitrates (more than 128 kbit/s), most people do not hear significant differences.

Many users feel that Vorbis reaches transparency (sound quality that is indistinguishable from the original source recording) at a quality setting of -q5, approximately 160 kbit/s. For comparison, it is commonly felt that MP3 reaches transparency at around 192 kbit/s (except for the frequency range, which only occasionally exceeds 16kHz), resulting in larger file sizes for the same sound quality.