http://en.wikipedia.org/wiki/Advanced_Audio_Coding
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AAC is also the default or standard audio format for: Apple's iPhone, iPod, iPad, Nintendo DSi, iTunes, DivX Plus Web Player, Sony's PlayStation 3 and is supported by Sony's PlayStation Portable, latest generation of Sony Walkman, phones from Sony Ericsson, the latest S40 and S60 models from Nokia, Android based phones, Nintendo's Wii (with the Photo Channel 1.1 update installed for Wii consoles purchased before late 2007), and the MPEG-4 video standard.
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I didn't realize their current DRM free format wasn't strictly AAC:
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On May 29, 2007, Apple began selling songs and music videos free of DRM from participating record labels. These files mostly adhere to the AAC standard and are playable on many non-Apple products but they do include custom iTunes information such as album artwork and a purchase receipt, so as to identify the customer in case the file is leaked out onto peer-to-peer networks. It is possible, however, to remove these custom tags to restore interoperability with players that conform strictly to the AAC specification. As of January 6, 2009, nearly all music on the iTunes Store became DRM-free, with the remainder becoming DRM-free by the end of March 2009.[37]
iTunes supports a "Variable bit rate" (VBR) encoding option which encodes AAC tracks in an "Average bit rate" (ABR) scheme. As of September 2009, Apple has added support for HE-AAC (which is fully part of the MP4 standard) but iTunes still lacks support for true VBR encoding. The underlying QuickTime API does offer a true VBR encoding profile however.
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