Bit Depth:
This is a measurement of how many bits per unit signal. Think of it as the ability for a device or process to take a digital signal and make an analog output. It takes the sign waves and approximates them into bits of data. All CD's have a 16 bit Bit Depth. Some audio DVD's have a higher bit depth and many devices have higher bit depths still. The reason this governs the signal to noise ratio is because the more frequency components you can acquire, thus the larger bit depth, the higher the peak can be when it is transformed into a pulse. An infinite bit depth would results in a very narrow and high amplitude pulse.
Bit Rate:
This is the rate at which the bits travel. The higher the bit rate the more bits are available for a device to be captured and translated via the ADC and DAC processes. The lower the rate the fewer bits are sent per second and the more compressed or lossy the data becomes. The higher the bit rate the more bits are available and with a higher bit rate system the more bits are captured. This represents a less compressed and thus less lossy bit transfer process. CD's have a 44.1kHz bit rate. Keep in mind that this is a frequency not in kbps like other measurements. We take 44.1bits/second x 16bits/sample x 2 ( channels for stereo ) and we end up with approximately 1.4Mbits/s. This is the bit rate of a CD.
For audio storage devices the bit rate will simply determine not only lossy vs lossless, but how much space the file takes up. Most mp3 players are simple storage devices and do not differentiate between which type of bit rate is used. They typically use whatever you store on them be it 128kbps or higher. The higher the bit rate the more bits are going to captured and the more space the file will take up. It should be mentioned that audio devices do differentiate between types of audio encoding depending on the audio codec and hardware used, but they typically can handle uncompressed audio formats.
For me I can hear the difference in signal to noise going from 16 bit to 24 bit Bit Depth on my m903. As far as I know you can still stuff 16 bits into a 24 bit device, but not generally the other way around. Remember that a CD is "16/44.1" the 44.1 is in kHz and thus much less lossy than say 16/192. The CD is really 16/1.4Mbps vs 16/192kbps. Always remember to use the same units in any comparison. Similar problems arise when devices list Total Harmonic Distortion(THD) in dB vs a percentage. For example, if the THD is listed on one device as -100dB and on another device .001% which do you think has a better THD? If you guess/knew that the -100dB device has the better THD then you would be correct. The lack of standardization among vendors creates a bit of chaos in the consumer world.
You will not gain anything by ripping a CD which as we now know is a 16/44.1kHz device at a 24/44.1kHz rate. You are always limited by what the recorded is on be it CD,DVD, or another device. You will, however, have a less lossy file ripping a CD ( 16/44.1kHz ) at 16/256kbps in comparison to a more lossy 16/128kbps. You can hear the differnce if your gear is of high enough quality and not coloring the sound. try these links below for a bit of comparison fun.
http://www.mp3ornot.com/
I guess a note should be made about that link. With my m903 driving my DT990's I can hear the difference, but with my AH-D2000's I was unable.
I give my most sincere apologies to anyone who finds a mistake/typo or other fictitious piece of information.
Edited by NA Blur - 9/30/11 at 1:19pm