With lossless codecs, all the musical information that forms the basis of the audio file is preserved when the file is compressed and stored on the computer. Lossless codecs provide the highest audio fidelity, but the files they create are relatively large, which means that you can fit fewer songs on a computer hard drive or music server.
The most common lossless codecs are
Windows Media Lossless: Part of Microsoft Windows Media Player 9 and 10, this codec is built into the Windows Media Player software and is supported by some media adapter systems.
Apple Lossless: Included with iTunes software, Apple’s Lossless Encoder is Apple’s competitor to Windows Media Lossless.
Free Lossless Audio Codec (FLAC): Free Lossless Audio Codec is, as its name implies, a lossless codec that’s free. A few audio players that support the FLAC codec include the Sonos Digital Music System and the Slim Devices Squeezebox.
Lossy codecs discard some part of the musical information to make the files smaller — for faster downloads on the Internet or to cram more music on a given size of computer storage device. You probably won’t notice the difference when listening casually, but many people can hear a difference when lossy and lossless versions of the same music are played back over a high-quality home theater audio system.
Popular lossy codecs are
MP3: MPEG-1 (Motion Picture Experts Group 1) Audio Layer 3 is the full name of the most common digital music format. MP3 audio files are the ones commonly traded (usually illegally) on the Internet, and they're the most common digital music codec used on PCs and digital music systems in a wireless network.
WMA: Windows Media Audio is the standard audio format used by Windows Media Player and compatible hardware. A lossless version of WMA does exist, but most WMA files use a lossy compression system.
AAC: Advanced Audio Codec is the format used by Apple Computer’s iTunes Music Store and is the default codec for music encoded using the iTunes application. Like WMA, AAC files are lossy (though within Apple’s iTunes system there is a lossless codec as well, called Apple Lossless).
Ogg Vorbis: Another free codec is Ogg Vorbis. Ogg Vorbis is designed to be free from the licensing fees that software and hardware companies must pay for other codecs such as MP3, and also provides improved sound quality compared to other lossy codecs.