assuming you want to transcode a 448kbps ac3 into smaller lossy format, my personal recommendation would be, in short : 1. to create AVI - encode to stereo mp3 2. to create stereo OGM/MKV - encode to stereo vorbis 3. to create multichannel OGM/MKV/MP4 - encode to 5.1aac LC or HE, depending on the quality/space you can efford. reasoning : 1. old and working method. existence of some stand-alone AVI+MP3 players 2. vorbis is a free codec & there are lots of free good vorbis encoding tools 3. aac is more advanced than ac3 & vorbis in represnting multichannel audio.