A lossy compression scheme is one where data is shortened by throwing away part of it, hopefully the part which has less importance. In digital audio technology a lossy compression scheme tend to throw away the sound which cannot be heard by the human ear.

This also means that when you compress a sound and then you decompress it, the resulting sound is not identical to the original one.

Lossy compression scheme is used in many audio technologies, like MP3, MP4, and Ogg Vorbis, but it is also used in popular image and video compression like JPG and DivX

On the other side a lossles compression scheme compresses data so that once you decompress them, what you get is exactly the same of the original data.

Popular lossles compression schemes are those used in ZIP and RAR compression.

In digital audio one of the most famous lossles compression format is FLAC.