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FLAC is also compressed but you're right that it's lossless. MP3 and most compressors use standard compression methods, as does FLAC, but they take it a step farther by discarding sound data which it's hoped the user won't miss. They do this in a very intelligent way and it works pretty well but loss is loss and quality is reduced. How much it's reduced depends on the quality level the user tells it to use when creating the MP3 file.
I grew up listening to music on radios in the 1940's and then in the 50's and 60's the quality of the reproduction got a lot better. I can hear the difference at times in losseless and lossy compression but for the most part I don't notice it. It's all a lot better than I grew up with.
Still, if you have the equipment you might as well have files that can push it. I don't so I'm generally happy with middling MP3 compression.
Barry
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