AC3 or Dolby Digital as it is more commonly known will be more backward compatible on older DVD and Blu-Ray players. Both are still lossy codecs but results vary between the two depending on how much you want to compress the result, with AC3 giving better results at lower bit depths. If this is about quality issues again, don't worry. By the time a commercial DVD/BluRay disc is manufactured, the quality has already been compromised before it reaches the disc presses, as the master tracks would have been recorded using 64 bit wav. files before mixdown and final export. Some sites such as YouTube ask files to contain the AC3 format rather than MPEG in their upload specs.
MPEG in this instance refers to MPEG-1 Audio, Layer 2 which is a two channel format rather than a 5.1 surround format which has slightly less frequency response headroom and may result in silence coming from a DVD recorder using that format, although that effects NTSC more than PAL equipment.
When i started using MEP back in 2004 the DVD export template default was MPEG2 for PAL exports and AC-3 for NTSC and I think the reason at the time was for compatibility in NTSC countries as Cube ace is perhaps referring to ( .....or was it the other way around...??)