MIDI files, on the other hand, do not contain actual audio. Instead, the music sequence is recorded as a series of numbers which explain how the music is to be played back. The advantage is that MIDI files are very small, but the sound is totally dependent on the output device (usually the sound card in the computer).
MIDI stands for Musical Instrument Digital Interface, and was first introduced in 1983. This is not actually an audio format, but rather a protocol by which various electronic musical instruments, including sound cards in computers, connect to and interact with each other. However, many people use the term "MIDI" to refer to files (sequences) produced by MIDI devices. Unlike the following audio formats, MIDI files do not actually contain music recordings, but rather a set of instructions on how to play a tune. Think of a piano roll, which contains the information on how to play a piece, but can't produce music without a player piano.
As mentioned before, the main disadvantage of MIDI is that the quality of playback is dependent on the playback device (sound card or synthesizer). A MIDI sequence that sounds great on a high-end card may sound terrible on a cheap one. Also, MIDI is for instrumentals only, not vocals. Most MIDI sequencing programs such as Cakewalk and Cubase can combine MIDI with digital audio so that vocals or non-MIDI instruments can be incorporated. However, these are all proprietary formats, so if you record such a file with Cakewalk the tune can be played back only with Cakewalk.