I own a Sony MDS-302 home minidisc deck. While reading all the criticism of the MD sound quality, I got a feeling that the people complaining have not experienced the sound quality of the third generation MD decks. My MDS-302 recorder is equipped with ATRAC-3 which is leaps and bounds ahead of the first ATRAC system Sony rushed to get out when Philips introduced DCC. A friend of mine has the original MZ-R1 portable recorder and we did some critical listening tests.
We compared the sound quality of CD-dubbed minidiscs (using the analog inputs to test the ADC and DAC converters). The selections included modern rock, alternative, pop, jazz, Hindi film music, reggae -- basically I listen to anything that sounds good. I used high quality headphones attached directly to the outputs of each deck to make the comparisons.
The dub onto the MZ-R1 was not as clear as the original CD and the difference was very noticeable. The 5:1 lossy compression was obvious. However, the sound quality still surpassed that of high quality tapes.
In terms of the MDS-302, I can honestly tell you that I could not detect any difference in sound quality with all the selections I used. From what I heard, it sounded the same; if there were any discrepancies they must have been very minor. I have already built up a rather large music library with 100% of the discs dubbed from CDs and tapes. From my personal experience and talking to dealers, manufacturers, critics and Net-surfers, I have the following advice for people considering MD for use but concerned about the sound quality and future of MD:
If you want digital recordability and playback with CD quality sound, MD is the way to go. For the vast majority of people, the differences between MD quality and CD quality is imperceptible thanks to Sony's ever-improving ATRAC algorithms. The only people that I would not recommend it to are audio purists and musicians demanding ultra-high clarity and definition. Unless you spend a lot of time listening to orchestra and other music with sharp tonal qualities and want the best possible sound quality, MD will give you crisp clean sound that easily surpasses tapes and is practically indistinguishable from CDs. I would also recommend that you buy a unit with ATRAC-3 (or the highest version possible). Each generation seems to offer improved compression schemes and improved DAC converters.