SACD uses a very different technology from CD and DVD-Audio to encode its musical data, a 1-bit sigma-delta modulation process known as Direct Stream Digital at the very high sampling rate of 2.8224 megahertz.

SACDs may contain a 2-channel stereo mix, a surround mix (usually the 5.1 layout), or both. To be precise, the so-called surround mix does not have to be in the 5.1 format. The old quadrophonic 4.0 format will do as well, most noticeably on the 2001 SACD release of Mike Oldfield's Tubular Bells. The correct designation for the surround part of a SACD is "multi-channel", and usually has its own "Multi-Ch" logo on the back cover.

There are three types of SACDs:

Hybrid: Includes an audio CD layer compatible with CD players (dubbed the CD layer), and a 4.7GB SACD layer (dubbed the HD layer). This is the most popular type.
Single layer: Similar to a DVD-5 DVD, a 4.7GB SACD layer with no CD layer (i.e. one HD layer only). This type was used by Sony Music.
Dual layer: Similar to a DVD-9 DVD, two SACD layers with no CD layer (i.e. two HD layers). This type is rarely used.
There is a format war between Super Audio CD and DVD-Audio. Another challenger is the DualDisc format. At present SACD format has mainly taken the interest of audiophiles, with relatively little mass market acceptance. As of May 2005, there have been approximately 3,000 SACD releases, about 40% of which are classical music (source: However, some more popular albums have been made as SACDs, including most of Peter Gabriel's catalogue, most of Bob Dylan's cataloogue, most of The Grateful Dead's catalogue, Pink Floyd's seminal album Dark Side of the Moon (the 30th anniversary edition of 2003) or Roxy Music's Avalon (the 21st anniversary edition, 2003). The two latter albums were released on SACD to take advantage of the format's multi-channel capability. Both were remixed in 5.1 surround (leaving the original stereo mix intact), and relased as Hybrid SACD's, but not on the competing Multi-Channel compliant DVD-Audio as an incentive for record buyers to switch from CD to SACD. The competing DVD-Audio had its own incentive albums not released on SACD for the same purpose, including Queen's The Game and A Night at The Opera.

Because some discs are issued in a hybrid format only, such as the remastered Rolling Stones albums in 2002, many music buyers are building an SACD collection even if they have no SACD playback equipment and don't especially care about SACDs. This is bound to give SACDs an advantage over DVD-Audio when and if SACD playback equipment becomes cheaper and more available. At the same time, buyers who are looking for SACDs find hybrid discs attractive if they also play music on conventional CD players.

One issue in favor of DVD-Audio is the current lack of algorithms and hardware for dealing with DSD audio. Most surround sound AV Receivers can do some processing on multi-channel audio in order to improve the speaker matching and account for the room acoustics. However, currently this cannot be done on DSD audio without first converting it to PCM audio like that used in DVD-Audio.

However, many more buyers are choosing lower-fidelity and convenience, in the form of MP3s and similar highly-compressed formats, than are upgrading to get higher fidelity with SACD or DVD-Audio. This is no doubt because most people listen to music outside their house and couldn't hear the difference on their portable playback equipment anyway. Another reason is that people want to download music, which requires file sizes well below what SACD or DVD-Audio streams would demand.

The Sony PlayStation 3, expected in Spring 2006, will include SACD support.