1) The document discusses audio compression using Daubechie wavelets. It involves using optimal wavelet selection and quantizing wavelet coefficients along with A-law and U-law companding methods.
2) The key steps of wavelet-based audio compression are thresholding and quantizing wavelet coefficients, then encoding the data to remove redundancy and reduce the number of coefficients.
3) A psychoacoustic model is incorporated to determine inaudible quantization noise levels based on auditory masking principles. The masking thresholds are converted to constraints in the wavelet domain to guide coefficient quantization and selection of an optimal wavelet basis.