How does MPEG-1 AUDIO work?
Well, first you need to know how sound is stored in a computer. Sound is pressure differences in air. When picked up by a microphone and fed through an amplifier this becomes voltage levels. The voltage is sampled by the computer a number of times per second. For CD-audio quality you need to sample 44100 times per second and each sample has a resolution of 16 bits. In stereo this gives you 1.4 Mbit per second and you can probably see the need for compression. To compress audio MPEG tries to remove the irrelevant parts of the signal and the redundant parts of the signal. Parts of the sound that we do not hear can be thrown away. To do this MPEG Audio uses psyco-acustic principles.
