It's the age-old question for many portable audio enthusiasts: Which is better, MiniDisc or MP3? Before this answer can adequately be explained, a short primer on MiniDisc is required.
When people were looking for a replacement for the tried and true cassette-based Walkman-style portable audio player, the CD was the next logical choice. It had much better sound, didn't wear out, didn't need to be rewound, and was durable. The trouble with CDs was they weren't perfect, so Sony responded in the early '90s with the MiniDisc format.
The MiniDisc did everything people had wanted to see in CDs, only more. You could record directly onto them (no CD-R/Ws existed back in the early '90s), they didn't skip when you took them jogging, and the player was relatively small. Like CDs, MiniDisc was a digital format, which meant no pops or hisses and it boasted the ability to jump from track to track.
MiniDisc technology
MiniDisc is a technology developed from Sony's experience in Magneto-Optical (MO) drives. A precursor to CD-R/W technology, the MO drive tried to combine the best qualities of CDs and floppy disks. Like CDs, MO discs hold large amounts of data but allow you to write or delete data in the same way you would with a floppy disk.
How does the MO work? A laser head and magnetic head are situated on opposite sides of the disc. The laser is above the disc and the magnetic head is below. The laser does two separate things. First and foremost, the laser reads the data from the disc. Second, the disc is heated up to make the magneto optic film in the disc susceptible to magnetic influence so it can be written to via the magnetic head.
It is this technology that allows the MiniDisc player to write and erase information from a MiniDisc. However, a MiniDisc cannot hold the same amount of data as a CD. MiniDisc is only able to hold 160MB of data vs. the 650MB a CD is capable of holding. To compensate for the lack of storage capacity MiniDisc uses a technology called ATRAC (Adaptive Transform Acoustic Coding).
ATRAC compression
ATRAC is a "lossy" compression technology, meaning that in order to reduce data size (about one fifth the original size), information that is deemed unneeded or superfluous is removed. The standard ATRAC bitrate is 285.3 Kbps. Newer versions of the ATRAC standard found in more recent MiniDisc players allow for even smaller bitrates at the expense of audio quality.
Half a decade after the MiniDisc hit the market, a boom in personal computer and related technologies helped give rise to the MP3 format. MP3 allows for near CD-quality music files that can be played on any multimedia PC. Now, instead of lugging a library of CDs around, one could have them stored directly on their hard drive. Plus, as with CDs and MiniDiscs, the information is stored digitally.
With the flood of portable MP3 players on the market, the debate over MP3 and MiniDisc has heated up.