MP3 files are basically compressed versions of CD's. A compression system was developed by the moving picture experts group that was used for video data. One of the subsystems for this was to compress sound (MP3). MP3 can compress a song by a factor of 10 or 12 and still have it sound close to the CD quality.The main goal of MP3 is to compress a CD quality song so it can be easily stored. A 30 megabyte sound file can be reduced into a 3 megabyte sound file in MP3 format.
To further understand MP3, a person should understand how a CD works. Music is sampled 44,100 times per second. These samples are 2 bytes long. This means that the average 3 minute song on a CD is around 32 megabytes. This is where MP3 comes in. The 32 megabyte song is compressed into a 3 megabyte song in order to make downloading speed faster and storage easier. the biggest concern with MP3 files are if they will match the Cd quality. It is possible to compress a song and still have it sound like CD quality. this is done by using a technique called perceptual noise shaping algorithm. It is perpetual because MP3 format uses characters of the human ear to design the algorithm. Certain noises cannot be heard by the human ear and certain noises can only be heard by the human ear. By using all of these factors, parts of the song can be eliminated without hurting the quality of the song.
Source: http://computer.howstuffworks.com/mp31.htm
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