CD Encoding
What's in the data stream?
Earlier, I mentioned that a "Table of Contents" is stored at the beginning of the compact disc (in the same way that the Master Boot Record is stored at CHS 0,0,0 on a hard disk). Just like a hard disk, a certain percentage of the disc's storage capacity is used to hold information the drive needs to keep track of what it's doing.
Synchronization data, header and sub-header information, error correction code (ECC) and error detection code (EDC) all reside on the disc around the user information. The exact layout and byte length of each data field is dependant on the format and mode of the encoded data. Over the years, several different CD encoding formats have been released. Sony and Philips have continued to cooperate over the years to refine and introduce new CD format standards, each time improving the operation of the CD-ROM by making the control information more efficient, or by taking up less space on the disc. The first and most popular format introduced was the "Red Book" Audio CD standard.
Encoding
CD-ROMs are embedded with little pits to represent digital 1s and 0s. Without some sort of conforming standard to tell the player what the data means, it would be impossible for the reader to present the information to you in a logical and sensible order. Unless the CD-ROM knows what the format of the data is, it has no way of knowing exactly which data bits represent control information, and which is user information.
If you insert a data CD, (such as Microsoft Office, for example) into an older audio CD player, the player will recognize that a disc has been inserted. However, since the player does not understand the information on the disc, it will attempt to playback the data as audio, generating a nasty sounding static. This is because that player only understands audio CD data, and does not understand how to handle the computer information that it's reading.
As such, the player does the only thing it knows how: it tries to convert the information to analog and play it back as audio. In order for the drive to understand the inserted disc, there has to be some agreed upon method of having the disc identify itself to the drive. Such a standard did not exist in the past.
New standards were created for exactly this reason. Without Sony and Philips, among several other companies, working to build universal standards, each manufacturers CD players and CD-ROM drives would not be able to read their competitor's disc. This was exactly the case in the early 80s, and something had to be done about it.