Initially popularised among the free Linux community, Ogg Vorbis is the most popular alternative audio codec to MP3, AAC and WMA. The first thing to highlight about Ogg Vorbis is that it's open source and free, not just to consumers like you and me, but also to developers who want to include it in their software or broadcast Ogg Vorbis streams over the Internet.
Indeed, development on Vorbis began in 1998 as a direct response to the decision of Fraunhofer to charge a license fee for its MP3 technology, and version 1.0 was finally launched in 2002
Ogg Vorbis has been tweaked with performance at low bit rates in mind, but it also offers good flexibility at higher bit rates. If you use one of the popular encoders to rip your music to one of the above formats, you're limited to 320kbs (LAME MP3), 320kbps (iTunes and AAC) and roughly 192kbps (Windows Media Player 11 and WMA). Ogg Vorbis' q10 variable bit rate setting allows you to encode at roughly the equivalent of 500kbps, as close as a lossy encoder is likely to get to a lossless encode.
Vorbis uses the same simplified sub-band transform as AAC and WMA - an improvement over MP3's two-stage process - more sophisticated stereo channel encoding and fully gapless playback.
The downside of Ogg Vorbis is that, despite its rising popularity, the majority of players still don't support it and that's unlikely to change while iTunes and Windows Media Player dominate the music management landscape.