AAC is a lower bitrate format than MP3. This means it has more Psycho-Acoustic compression.
This means it tries to trick your ears into THINKING something sounds great, rather than actually making it sound great.
You cant really tell through poor headphones or laptop speakers.
AAC is an apple owned format which has built in digital rights management. It sounds equally as good as MP3 at about 128kbit. Which is to say, lousy (but is the most popular MP# bitrate.
To the corn row wearer above - please understand exactly what you are talking about. You have it half right....
MP3s can be higher or lower bitrate however, which means quality will differ WILDLY. The codec used (LAME etc) will also change the quality.
Basically, all compressed audio will indeed sound like ass.
apple does not own AAC. it's the audio part of the MP4 spec. apple does have their proprietary FairPlay DRM used on iTunes Music Store files tho, but stuff you rip in iTunes has no such DRM.
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