AC-3 is the most common version containing up to 6 total channels of sound, with 5 channels of full-bandwidth of 20 Hz - 20 kHz-normal range for speakers (front left and right, center, front, right rear and left rear) and one dedicated output channel for low frequency sounds known as low frequency Effect, or subwoofer. The Dolby Digital format also supports the use of Mono and Stereo. The AC-3 is one of the so-called perceptual compression formats. What it does, basically, is to remove all parts of the original sound, encoded analog, which can not be perceived by the human ear. In this way, it is achieved that the same information is smaller and therefore take up much less physical space. Once achieved compression of the original wave, you can add more information that was not previously possible.
MPEG-4 Part 14 or MP4 is a digital multimedia format most commonly used to store video and audio, but can also be used to store other data such as subtitles and still images. Like most modern container formats, it allows streaming over the Internet. The only official filename extension for MPEG-4 Part 14 files is .mp4, but many have other extensions, most commonly .m4a and .m4p. M4A (audio only) is often compressed using AAC encoding (lossy), but can also be in Apple Lossless format. M4P is a protected format which employs DRM technology to restrict copying. MPEG-4 Part 14 (formally ISO/IEC 14496-14:2003) is a standard specified as a part of MPEG-4.