Which audio format to use for DVD movies

Which audio format to use for DVD movies - AC3, PCM or MP2 ? What is the difference between audio formats used in DVD Video discs?

Each audio format intended for DVD has different compression ratio and quality. There are three main types of audio: AC3 (Dolby Digital), PCM (uncompressed), and MP2 (MPEG Layer II). The most common quality of audio in DVD is 48hz (frequency), with Dolby Digital 5.1 (surround sound).

AC3

It's a Dolby Digital Audio. AC3 supports not only stereo, but also surround. Audio bitrate range: from 128Kbit/s to 384Kbit/s. 192Kbit/s is the most common bitrate.
Surround sound must have at least 6 separate source channels. Taking a stereo or mono audio file and forcing it into Dolby 5.1 format will only waste space and provide no advantages.
Pros: AC3 format has very good quality, surround sound support and very high level of compression. That's why the size of audio information is small.

AC3 is the best format to use in DVD

PCM

Cons:  The main disadvantage of Uncompressed PCM (WAV or AIFF) audio format is size. It stores all audio information without compression. It's a recommended format for audio editing. Do not use PCM in final versions of DVD. Only leave it as PCM if final disc size is unimportant or if unusual distortion occurs from AC3 or MP2 compression. Common bitrate is 1536k.
Pros:  The main advantage of the PCM audio is excellent quality. With PCM you can preserve all audio frequencies (even outside the range of human hearing).

MP2

Another form of MPEG audio is MP2. Also known as MPEG Layer II and .mpa files. This format is not officially supported for NTSC video. If you have MP2 audio then do not recompress it to AC3, recompression may destroy the quality. So, leave it untouched. But if you have PCM uncompressed source, I definitely recommend to use AC3 instead of MP2. Common bitrate is 256Kbit/s.
Pros:  The main advantage of MP2 is good compression level and ease of audio conversion from SVCD or VCD.
Cons:  The main disadvantage of MP2 is not very good quality, and lack of support by all devices.