Why should I use MPEG-2 AAC rather than Dolby AC-3?

AAC is a state-of-the-art audio compression algorithm that provides compression superior to that provided by older algorithms such as AC-3. AAC and AC-3 are both transform coders, but AAC uses a filterbank with a finer frequency resolution that enables superior signal compression. AAC also uses a number of new tools such as temporal noise shaping, backward adaptive linear prediction, joint stereo coding techniques and Huffman coding of quantized components, each of which provide additional audio compression capability. Furthermore, AAC is much more flexible than AC-3, in that AAC supports a wide range of sampling rates and bitrates, from one to 48 audio channels, up to 15 low frequency enhancement channels, multilanguage capability and up to 15 embedded data streams.