MP3's are CD-quality sound files on your computer. There are many different ways you can get these files. You may buy an entire CD or a single song from a CD directly from an online retailer, or you may record ("rip") your own CD's into this format, or you can download the files for "personal, limited use" off web sites, FTP sites, or newsgroups.
My recommendation is to trash your stereo, get broadband access, decent speakers for your PC, and go for it! Here are some links to sites to get you started:
Winamp - The BEST MP3 player out there... and it's free! Audiofind - One of the many search engines for MP3's that you can download directly with your browser. ZD Net - Information on FTP Xfers, as well as the necessary programs. MP3 Grouppie - The best newsgroup reader for MP3 downloading. A must have for broadbanders!!! Real Player - Allows you to turn your music CD into a MP3 file.
Eventually, using the MP3 system, you will have to get a CD-W to reclaim space on your hard drive. I imagine it won't be long before new CD players can play the MP3 file format, and then you'll have a CD with 200-300 songs on it.