It does take 5 hours, yes. When running in MDLP (long play) modes, the quality does deteriorate - it's the equivalent of going down to something like 64k on MP3.

Sony have been showing NetMD, which is a USB-connected MD drive which will record MP3s to MD at up to 32x (when I saw it at IFA, it looked like about 8x though). Not available yet though.

Hugo