For the best resource (specifications, reviews, message boards, links, etc.) on minidiscs, check out
minidisc.org.
Many people think of portable MD players/recorders and liken them to MP3 players. It would be more accurate to compare them to very advanced tape (cassette) players/recorders.
MP3 is an encoding format (it descibes what a file should look like). The same MP3 file can be played on a computer, portable MP3 player, etc. MD encompasses both the physical package (the disc enclosed in plastic) as well as the encoding on that package (ATRAC). A minidisc never has an MP3 file on it; it must always be ATRAC encoded audio.
MD devices are mechanical in nature; they have "moving parts". This means it is possible for them to skip. MP3 devices are often electrical machines (aka "solid state" or "no moving parts") which do not skip, but there are also those that are mechanical and could skip.
MD can be encoded in real-time; MP3 would require some serious computational horsepower to do that. Put differently, you can "record" into an MD by plugging a regular audio input source into the MD portable's audio input jack and playback (and record) at regular speed. Compare that to "recording" an MP3, where you start with a regular audio source (or a CD) and store it in an intermediate format (WAV file, etc.) on a computer. The encoding process (from this intermediate format) normally lasts longer than the sample that is being encoded. Hence, it can't be done in real time.
For the most part an MP3 portable cannot stand on its own; you need to use it with a computer for it to be effective. Contrast that with an portable MD recorder, which is much more independent - you could take it to a concert and make a live recording. On the other hand, if you do use a computer for MP3s, MP3 portables work very well (transfer the MP3 file digitally to the device), whereas MD portables were merely ok (play back the MP3 file at regular speed into the portable's audio input jack). The NetMD stuff is a solution to this problem. The software (on the PC) converts your MP3s to the ATRAC encoding; this ATRAC-encoded file is then transmitted to the device through a USB cable or some other digital method (which guarantees that the file arrives quickly and intact).
I have heard that MDLP2 is "good enough" but MDLP4 is noticeably different (for the worse). I only own one MD device (regular MD, no MDLP) and I would be hard pressed to tell the difference between stuff I have recorded on that medium and that coming from a CD.
If you have a large MP3 collection an MP3 device is probably better for you. If, on the other hand, your collection is in the form of audio CDs (or tapes or LPs or 8 tracks or live concerts or ...), MD should be the better choice. I chose MD over MP3 because I didn't want to depend on a computer, and because the cost of additional storage space was much, much lower (2-3 years ago), and am very satisfied with it. Short of something like an iPod, I think MD is still a better choice (unless you want it for something like jogging where MD could very well skip).