It ripps cd's as you play them, not the best idea in my book but you never know.

Yeah, such a terrible idea that the Empeg guys implemented it flawlessly in the Rio Central and in their prototypes for Visteon.

BTW I have heard of "ATRAC3" encoding before how does it compair to MP3,

If I recall correctly, it is the same format used for Minidisc. It compares favorably to MP3.

Edit: Clarification... It compares favorably in terms of audio quality. In terms of utility, nothing beats MP3 because it's so universal, cross-platform, and has the largest library of tools to work with.