XBox Video Encoding: AAC versus AC-3 audio
January 27th, 2008 | by Jeff Fitzsimons |The XBox 360 can play back xvid/divx + AC-3 (or AAC), and H.264/x264 + AAC. I’ve noticed a distinct difference in audio quality between AC-3 and AAC, at both the default 128kbps and forced 192kbps AAC (--aencoder aac --arate 48 --ab 192).
This is easily demonstrated by listening to the first few seconds of the Fox Searchlight intro, which features kettle drums. The AAC is lacking substantial low-frequency character which is present in the AC-3 version.
This will likely never matter if you watch your movies exclusively on your computer or use only your television’s speakers, but on my NHT 2.5′s, the AC-3 track sounds significantly better.