Linear PCM is uncompressed (lossless) digital audio, the same format used on CDs and most studio masters. It can be sampled at 48 or 96 kHz with 16, 20, or 24 bits/sample. (Audio CD is limited to 44.1 kHz at 16 bits.) There can be from 1 to 8 channels. The maximum bit rate is 6.144 Mbps, which limits sample rates and bit sizes when there are 5 or more channels. It's generally felt that the 120 dB dynamic range of 20 bits combined with a frequency response of around 22,000 Hz from 48 kHz sampling is adequate for high-fidelity sound reproduction. However, additional bits and higher sampling rates are useful in audiophile applications, studio work, noise shaping, advanced digital processing, and three-dimensional sound field reproduction. DVD players are required to support all the variations of LPCM, but many subsample 96 kHz down to 48 kHz, and some may not use all 20 or 24 bits. The signal provided on the digital output for external digital-to-analog converters may be limited to less than 96 kHz and less than 24 bits.

Dolby Digital is multi-channel digital audio, using lossy AC-3 coding technology from PCM source with a sample rate of 48 kHz at up to 24 bits. The bitrate is 64 kbps to 448 kbps, with 384 or 448 being the normal rate for 5.1 channels and 192 being the typical rate for stereo (with or without surround encoding). (Most Dolby Digital decoders support up to 640 kbps, so non-standard discs with 640 kbps tracks play on many players.) The channel combinations are (front/surround): 1/0, 1+1/0 (dual mono), 2/0, 3/0, 2/1, 3/1, 2/2, and 3/2. The LFE channel is optional with all 8 combinations. For details see ATSC document A/52 <www.atsc.org/document.html>. Dolby Digital is the format used for audio tracks on almost all DVDs.

MPEG audio is multi-channel digital audio, using lossy compression from original PCM format with sample rate of 48 kHz at 16 or 20 bits. Both MPEG-1 and MPEG-2 formats are supported. The variable bit rate is 32 kbps to 912 kbps, with 384 being the normal average rate. MPEG-1 is limited to 384 kbps. Channel combinations are (front/surround): 1/0, 2/0, 2/1, 2/2, 3/0, 3/1, 3/2, and 5/2. The LFE channel is optional with all combinations. The 7.1 channel format adds left-center and right-center channels, but is rare for home use. MPEG-2 surround channels are in an extension stream matrixed onto the MPEG-1 stereo channels, which makes MPEG-2 audio backwards compatible with MPEG-1 hardware (an MPEG-1 system will only see the two stereo channels.) MPEG Layer 3 (MP3) and MPEG-2 AAC (also known as NBC or unmatrix) are not supported by the DVD-Video standard. MPEG audio is not used much on DVDs, although some inexpensive DVD recording software programs use MPEG audio, even on NTSC discs, which goes against the DVD standard and is not supported by all NTSC players.

source : the official DVD FAQ