You can define the properties of the audio files to be created on the Output tab.
The following setting options are available:
Input window
Output directory

Selects the storage location for the output file.

Button
Browse

Opens a browser window where you can select a storage location.

Drop-down menu
Mode for creating file name

Selects the method to be used for creating the name of the output file.

Check box
Automatically generate a playlist of stored audio tracks

Creates a playlist of the saved audio files. A playlist is a list of the ripped audio files in the right order with the right metadata. It is a very convenient tool − you simply have to select the playlist to add all the audio files in contains to an audio compilation or a playback application.

Drop-down menu
Playlist format

Selects a format for the playlist.

Drop-down menu
File format

Selects the output audio format for the selected audio file. The selected file format is available as the first entry the next time it is called up. You can choose between Nero AAC Audio, MP3 Audio, WAVE, AIFF, FLAC and Ogg Vorbis.

Drop-down menu
Quality

Selects the bitrate for the selected audio file format. If the bit rate is small, less data is transferred. The file is then small, but quality is lower. If the bit rate is high, more data is transferred. The file size is then large, but the quality is high. A value of 128 for MP3 files is near CD quality. For the MP3 Audio file format you can also select if you want to create an MP3 file or an mp3PRO file.
Only available if you selected the Nero AAC Audio or MP3 Audio file format.

Check box
Force compatibility with iPod

Makes Nero AAC Audio available for an iPod. 
Is only available if you selected the Nero AAC Audio output format.

Check box
Disable ID3v2 Unsynchronization

Disables the ID3v2 Unsynchronization during the decoding process.
ID3v2 Unsynchronization is a part of the MP3 decoding process. It increases the chance that the MP3 file can be played even with old software or hardware that does not support ID3v2. However, some devices that support ID3v2 do not support ID3v2 Unsychronization. The display of images or text tags might be corrupt on such devices when playing MP3 files with unsynchronized ID3v2. Select the check box if you have encountered such problems.

Check box
Add Album Art to file if available

Adds Album Art to the files. Album Art works for example as a mini view in the Explorer. Adding Album Art increases the file size. 
Only available if Album Art is available or chosen for this Audio CD.

 
AIFF
The
Audio Interchange File Format is an uncompressed audio file format from Apple® and represents a sort of counterpart to the WAV format from Microsoft. Files are larger than when using a compressed format, but the quality is higher. AIFF compressed is the compressed variation.

Nero AAC
Various MPEG-4 video and audio codecs are collated in Nero AAC and are fully compatible with the standard MPEG-4. Nero AG is continuing to develop these. In this way a substantially higher quality of the multi-media data is achieved. Further, additional features such as subtitles have been implemented.

MP3
The MPEG-1 Audio Layer 3 audio format is used to reduce the size of audio files to a fraction of their original size (factor 1:10) with little loss of quality. You can estimate about 1 MB per minute as opposed to 10 MB for the original files. This value and the quality can vary depending on the complexity of the audio signal. The bit rate used can be used as a measure of quality. The higher the bit rate, the better the quality, but also the more memory required.

WAV
The WAV audio format, also called WAVE or Waveform audio format, is an audio format from Microsoft and uses no data compression. WAV is the counterpart to the AIF format from Apple.

mp3PRO
mp3PRO is an MP3 codec that compresses audio files even more but in lower bit rates and better quality. 64 kBit/s in mp3PRO is the equivalent to 128 kBit/s in MP3.

Output Tab