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In Shoutcast there is option to choose will radio station run mp3 or aac, and i am not sure which one is better option. Please recommend.
What i read is that aac can provide same quality on lower kbps, but then wonder why is there an option to use mp3 at all ?

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AAC-HE when having low bitrate considerations.
MP3 if concerned about compatibility with all devices available.

112kbps mp3 could be a good compromise if you need both.


More elaborate version:
- AAC-HE requires your listener to have a special decoder installed and more computational power available, but uses a neat technology to "emulate" high frequency content without really encoding it faithfully — thus saving a lot of bitrate. For an average person the difference on 64kbps stereo is usually miniscule, you can even go as low as 40kbps if you really need to: for example, if your target audience use cellphones with pretty bad 3G streaming capabilities. One of my friends works on an Arctic station; that's an extreme, but actual example of need for savoring any bit we can.

AAC-LC is not the same as AAC-HE and generally is more compatible; it misses all the special encoding technologies, though. Thus, it requires around 128kbps stereo to sound good; that is a consensus, at least.

MP3 is ubiquitous. That's its biggest advantage, really. You can be sure that even a noname something manufactured 10-15 years ago would be able to open your MP3 stream. However, I would never recommend going lower than 112kbps for a stereo signal if quality is of any concern. MP3 is considered obsolete in many ways, and AAC is in every youtube video; however, (1) it doesn't mean that "MP3 quality" would impact your audience — in fact, close to noone would be able to tell any difference with 112kbps AAC-LC at all; (2) if a device plays Youtube it doesn't mean that it would be okay with your AAC stream, unfortunately.

I don't want anyone to be left behind, so I usually go with MP3.

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This is really down to personal preference.

AAC can be better for spoken word and less complex audio where bandwidth is tight, but mp3 can give better reproduction of complex music, such as classical or heavy metal.

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AAC is a newer enconding format, and uses lower bit rates as compared to MP3.

I've practically observed that mp3 sounds better for lower bit rates up to 64kbs while in the 96-192k AAC is way better. To my ears there is no difference at 256-320k bandwith.

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