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AC3 is the same thing as "Dolby Digital".
==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.