The .ogg file format is a type of audio file that makes use of open source Ogg Vorbis compression. It is supported by devices such as Archos and Samsung but is not supported by Apple iOS devices. The .ogg format has been utilised for the provision of streaming audio. The file format is unlikely at present to take a dominant share of the digital music market due to the synonymous nature of MP3 with digital audio.
The .ogg format is actually a container that potentially allows for different streams of audio, video and metadata. Ogg Vorbis is the compression format. It provides medium to high quality audio at between 16 and 128 kbps/channel and is better quality sound than mp3. The OGG file type is a lossy codec which means that data is discarded as part of the compression technique, resulting in a smaller file size. Ogg files are optimised for music files, but will still be of acceptable quality for speech only files.
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MP3 is a digital music format which allows CD tracks to be reduced to around a tenth of their normal size without a significant loss of quality. MP3 gets rid of a lot of the information recorded in a song that our ears are not able to hear and then uses complex algorithms to reduce the file size. This then enables you to get hundreds of songs on to a CD and it also has opened up a new market over the internet - the download market as download times have been significantly reduced.
The MP3 format is a lossy format. That means that an MP3 file does not contain 100% of the original audio information. Instead, MP3 files use perceptual coding. In other words, that means it removes the information that your ear doesn't notice thereby making the file smaller. The reason lossy formats are used over RAW is that RAW audio files are too large to travel over the internet at any great speed. By using lossy formats it enables even dial up users to download mp3 files at a reasonable speed. RAW file formats generally require 176,000 bytes per second compared to a lossy format which requires 17,600. The difference is massive and so are the download times.