@Iggy:
MPEG-1 Audio Layer 3, more commonly referred to as MP3, is an audio encoding format.
It uses a lossy compression algorithm that is designed to greatly reduce the amount of data required to represent the audio recording, yet still sound like a faithful reproduction of the original uncompressed audio to most listeners. An MP3 digital file created using the mid-range bitrate setting of 128 kbit/s results in a file that is typically about 1/10th the size of the digital data found on an audio CD.
MP3 is an audio-specific format. It was invented by a team of European engineers at Philips, CCETT (Centre commun d'études de télévision et télécommunications), IRT and Fraunhofer Society, who worked in the framework of the EUREKA 147 DAB digital radio research program, and it became an ISO/IEC standard in 1991. The compression works by removing certain parts of sound that are deemed beyond the auditory resolution ability of most people. It provides a representation of pulse-code modulation — encoding audio in much less space than straightforward methods, by using psychoacoustic models to discard components less audible to human hearing, and recording the remaining information in an efficient manner. This is quite different from the principles used by, say, JPEG, an image compression format, which are purely frequency domain based.