What are .AAC files? Should I save files with the .AAC file extension or .M4A?
AAC stands for Advanced Audio Coding and is the "backbone" behind both the MPEG 2 and MPEG 4 audio file formats. MPEG 4 Audio files contain (have encapsulated in them) AAC audio streams. Basically .AAC files are audio files that are not contained in a MPEG 4 Audio container file. They are the raw "building blocks" that are used to make up M4A/MP4 files. The use or distribution to others of .AAC files is not recommended as there is not a "tagging standard" for them. Based on the opinions of audio professionals we have received, you should always save your MPEG 4 Audio files in a container file and use either the .m4a or .mp4 file extension.

Plain audio .AAC files are not designed to contain song/album information like .m4a files can. Many players (such as Nero, Apple iTunes, iPods) will refuse to play .AAC files. To avoid these problems, always save your audio files to .m4a or .mp4 format instead.