Stereo and Multichannel

Stereo

Stereo refers to audio streams with two channels. It is by far the most popular setup these days, given it's the standard mode for audio CDs. Several radio and TV broadcasts are also stereophonic.

In the past few years, there has been a push from the recording industry and equipment manufacturers trying to convince customers to move from stereo (Audio CD) to multichannel (SACD, DVD-Audio). Reaction to these efforts has been lukewarm, and that is credited to the fact that the vast majority of the consumer base is "happy enough" with Audio CD. The channel order in stereo is left-right.

Multichannel

Multichannel refers to audio streams with more than two channels. The most usual multichannel setups are 5.1 (five main channels: front center, front right, front left, rear right, rear left and one Low Frequency Extension channel) and 6.1 (the five channels from 5.1 + back center). Formerly limited to movie theaters, multichannel audio has became popular since the introduction of the DVD video format. The two competitors to the title of CD successor, DVD-Audio and SACD, can also offer multichannel content. Some formats that support multichannel encoding are: AAC, (Ogg) Vorbis, WMA Pro, AC3, DTS, FLAC and WavPack. There's no standard channel mapping for multichannel streams, and each vendor (Microsoft, Dolby, MPEG, Xiph...) creates its own or copies it from another vendor. Multichannel recordings are often referred to as "Surround".

source:wiki.hydrogenaudio.org