That means that an MP3 file does not contain 100% of the original audio information. This then enables you to get hundreds of songs on to a CD and it also has opened up a new market over the internet - the download market as download times have been significantly reduced. MP3 gets rid of a lot of the information recorded in a song that our ears are not able to hear and then uses complex algorithms to reduce the file size. MP3 is a digital music format which allows CD tracks to be reduced to around a tenth of their normal size without a significant loss of quality.
MPEG-4 Part 14 or MP4, formally ISO/IEC 14496-14:2003, is a multimedia container format standard specified as a part of MPEG-4. Since stores like iTunes uses this container format, and it is used with iPod and PlayStation Portable (PSP), MP4 files have become more common. MP4 is a container format that can store video, audio and subtitle data (as well as more depending on content). MP4 files (MPEG-4 Part 14) are multimedia files.