There are just a few audio compression formats out there, just like there are only a few image compression formats (you may have heard of them: JPG, GIF, BMP). Two of the most popular audio formats are WMA, or Windows Media Audio, and MP3 (Short for MPEG, Moving Pictures Experts Group, Audio Layer 3). WMA is the older audio format, produced by Microsoft, to work with Microsoft's Windows media player. The WMA compression format was designed specifically for this format, and thus can not be converted to other audio formats.

The audio quality of WMA and MP3 audio formats tends to be noticeably different. WMA is a decent quality audio format when streaming at phoneline speeds (maybe 30kbps or so). At such speed WMA almost reaches an FM level of audio quality, although not quite. At 128kbps, Microsoft claims the WMA is nearly CD-quality, although many would deny this. WMA, however, is not to be completely looked over. The compression provides relatively small audio files and they require less processing power to execute. It thus retains a deminishing niche as MP3 has become more popular and widely used.

The MP3 audio compression was developed in Germany in 1991 by the Fraunhofer Institute. MP3 typically provides higher quality sound than WMA because it uses perceptual audio coding to compress CD-quality sound by a factor of 12. As a result, MP3 has become almost the universal standard among audio usage and broadcasting. It provides CD-quality sound at reasonable compression sizes and high streaming speeds. Watch out, however, at low bitrates, as MP3 quality will likely suffer.