From Hydrogenaudio Knowledgebase
 Overview AAC FAQ
AAC is the culmination of the current state of the art audio encoding techniques. It is designed to improve upon and replace MP3 as the defacto Audio Encoding standard. It usually offers (depending on the codec) equivalent quality to MP3 at a lower bitrate.
 What is the difference between *.MP4 and *.M4A?
Besides the extension, absolutely nothing. Apple came up with extension to distiguish between files with Video and Audio (the MP4 extension) and files with Audio only (the M4A extension). As far as the internal structure of the file, nothing is different.
 What MPEG 4 extensions does the Apple iPod Accept?
The iPod accepts files with the MP4 extension, the M4A extension, the M4P extension (a Protected AAC file), and the M4B extension for audiobook files (which can be either protected or unprotected). It will not accept unwrapped AAC files (files with the .AAC extension).
 What is the difference between LC (Low Complexity) and HE (High Efficiency)?
These are two of the various Object Types in the MPEG4 Systems Standard. LC is the most popular Object Type with all encoders/decoders supporting it. Currently, Apple, Nero, Coding Technolgies, and Panasonic have incorporated the HE AAC standard into their encoders, which allows for higher quality sound at lower bitrates then the LC Object Type does (at the same bitrate). The HE Object Type is only used for music with a bitrate of less than ~80kbps.
 What's the best AAC encoder?
Deciding the best AAC encoder is difficult, because the quality of an encoding depends not only on the encoder implementation, but also on bitrate, audio content, playback equipment and conditions, and the subjective perceptual judgement of the listener at playback time.
Since it is very difficult to quantify the quality of an encoder, listening tests are used.
A public listening test conducted by rjamorim in mid-2004 comparing different codecs, at 128kbps, with several music styles and featuring several listeners concluded that iTunes (the only AAC codec included in the test) was better than other codecs - even VBR-enabled ones.
The quality of any encoder is not linear with bitrates, and therefore these results may not be extrapolated to other higher or lower bitrates. It can also be said with great confidence that both the iTunes AAC encoder and the Nero AAC encoder are relatively 'mature' and should not fail badly (result in any obvious artifacts) on any particular sample at an average bitrate of 128kbps (i.e. Internet Profile for Nero AAC) or above (based on Roberto's listening tests, see bottom).
A public listening test conducted by IgorC in July 2011 comparing Nero, QuickTime True VBR, QuickTime Constrained VBR, Fraunhofer IIS (via Winamp 5.62), Coding Technologies (via Winamp 5.61), ffmpeg's AAC, at 96kbps, concluded that QuickTime was the best codec among the 6 codecs. Fraunhofer IIS (via Winamp 5.62) came next. ffmpeg's AAC, considered experimental at the time of the test, came in dead last.
Beyond that, only you can decide; you may want to conduct your own private listening tests, or you may base your decision on other criteria besides audio quality. See the Audio format guide for more information.
 Do AAC encoded files play back gaplessly?
Gapless playback is not part of the AAC standard and as such is not mandatory. However, certain companies can choose to add gapless encoding/decoding if they desire, providing it doesn't break compatibility with previous decoders. This is what Ahead have done with their Nero AAC codec. The files get encoded with information that allows the gap heard between files to be removed. This however is only possible with supported players (currently these include foobar2000 and Nero ShowTime). Currently Nero AAC and FAAC are the only encoders to have gapless encoding/decoding support.
 What software players can play back AAC music?
There are now a number of software players that can play back this new format. foobar2000 is considered by many to be a very high quality audio player, and it is certainly capable of playing back AAC encoded files. Other players include Amarok using libfaad2, Apple's iTunes, Winamp, Real Player and Windows Media Player using the CoreAAC filter and Moonlight MP4 Demultiplexer. Also for Directshow-based applications playback and encoding is possible using the commercial 3ivx filter suite.
 What hardware players can play back AAC music?
There are also a few hardware players that can play back AAC audio. The most famous of these is the Apple iPod series of products, all of which feature AAC playback. A number of mobile (cell) phones also support unwrapped AAC (AAC not contained in the MP4 container). Recent Pioneer HT receivers can play back AAC files on a USB key or other USB mass-storage device.