It must have been an early version of AAC. Bell was involved with that. And another message in the thread claims "the early versions of the audio compression stuff were not quite is good as the later versions (which became apples stuff)"
Regarding the early formats' fidelity, the defense Napster should have won with was that the plaintiff's assumption that digital copies were any good was false. The mp3s in question were barely broadcast quality, thus sharing low bitrate mp3 was not any different from sharing recordings of broadcast radio, a legal activity.