AC3
AC3
AC3 is essentially the same thing as "AC-3" which is the same thing as "Dolby Digital". Sometimes also referred to as DD, as in "DD 5.1" (short for "Dolby Digital for 5.1 channels").
Dolby's Audio Coding-3 (AC-3) coding and compression technology was used by Dolby to create "Dolby Digital". Dolby Digital is the brand name used for the AC-3 digital audio encoding system. First used in 1995 for movie theaters, Dolby Digital is now also considered the standard for high quality audio for home theaters.
The "AC3" name (without the hyphen) is often used to refer to any audio encoding which can be used for DVD encoding to match Dolby Digital's specification, but is not specifically licensed by Dolby.
AC-3 VS
AC-3 VS is Dolby Virtual Surround AC-3.
AC-3 VS uses the way you ears work to generate a surround sound feeling from a 2CH signal. This permits you to convert 5.1 AC3 audio that you might find on a DVD to AC-3 VS, dropping the birate to 192kbit/s while still maintaining a surround feeling and superior quality.