Howdy!
From: someone
I think the quality of MP3 over .wav goes without saying. Anyone know why they went with the wav dinosaur in SL? Seems redundant compaired to what appears to be cutting edge in all other areas of SL.
WAV files are just standard sound files with no compression, as has been stated. Raw WAV files tend to be of very high quality because they are generally straight digital recordings.
If you create a WAV file from a song on a CD, it will be practically an exact digital copy.
Because there is no compression, these files tend to be very large and unmanageable if the song or other sound you've recorded is longer than a few seconds.
MP3s are digital as well, but unlike raw digital recordings, a compression technique is used to squeeze the file down to a manageable size. This is called "encoding." In doing this, some of the original raw data is lost, and how much is lost depends on the compression factor chosen before the recording is made. A lot of people like to make MP3s as high quality as they can - which explains why some MP3s sound better than others. In higher quality MP3 recordings, the ear can barely (if at all) detect a degradation in sound quality compared to the CD or other high-quality medium.
MP3 is one of the first compression specs developed - it revolutionized the way music data (and helped paved the way for video and other formats) can be distributed. It made sharing of music (in the contemporary sense) possible. Sure, you can share WAV files, but a WAV recording of a song is generally too large to be practical, especially when we're talking about sharing on the Internet. Since MP3 technology came into being, other folks have developed compression techniques that not only rival it, but surpass it. However, they haven't caught on as readily. As we know, the best technologies don't always win the popularity game. MP3 is what is has always been most common, and until there is a far-reaching need to use some other format (like the awesome Ogg Vorbis and the admittedly decent Microsoft WMA formats), it is likely to remain the standard.
MP3 technology would allow decent quality full-length music tracks to be played in SL, but I think because of the nature of the huge streaming database SL uses for downloading graphics data, it would still be impractical.
It would indeed be useful, though, for dialogue and other shorter sound bites because it would make the files much smaller than the WAVs we're using now. Anything that is smaller flows through the wires quicker.

SL would benefit greatly from this.
Other programs, like Active Worlds, do actually handle MP3s and other formats successfully already.
I think it's an excellent feature request for SL.
-J