Lossless audio compression retains the original audio data without any loss in quality. This is ideal for professional use. It features high quality audio, that is identical to the original source. They have larger files than lossy formats. Examples of this would include FLAC, ALAC, WAV, AIFF.
Lossy audio compression reduces file size by removing audio data that is less noticeable to the human ear. This causes a sound quality reduction. They feature smaller sizes, suitable for portable devices, and faster transmission and easier storage. Examples of this would include MP3, AAC, OGG, WMA.
Normalization and compression are two distinct audio processing techniques used to adjust the volume of audio recordings. Normalization is the process of adjusting the overall volume of an audio file to reach a target level. It scans the entire track to find the loudest peak and raises or lowers the volume so that the peak reaches a specific maximum level (often 0 dB). Compression reduces the dynamic range of an audio signal, meaning it decreases the volume difference between the loudest and softest parts of the track. It makes quiet sounds louder and loud sounds quieter, resulting in a more balanced sound.