Questions about Emulated Sound

Hi there, actually I have a lot questions about emulated sounds, Experts, please answer them

1. Is there any quality differences of emulated sound and their released soundtracks? Is converting PSF into MP3 degrades the quality?
2. Why Emulated sounds are so damn small? How come a PSF2 file is much2 smaller than mp3 while it has a lot of information about music? What's the difference between streamed sound of PS1 and PS2 sound driver? How come the streamed sounds in PS2 could be converted into small psf2 files?
3. What's the sound format of GC? Are they sequenced or streamed?
4. What's the difference between PSF and miniPSF?

I think I have more questions later... but I don't know which. Feel free to answer them.

Jam it back in, in the dark.

whew, nice answers, thanks TCK, but you haven't answered my question about why streamed tracks in PSF2 sound could be so damn small.

more questions then:
1. Is there any real difference in OST of games that actually released their tracks from the emulated sound with the psf set? which one is much better?
2. How do VGM composers compose? What instruments they use actually?
3. What is "manipulator"?

That's all for today. Thanks before!

There's nowhere I can't reach.

I corrected my statement about psf2 being so damn small. Just yesterday I was surprised to see a psf2 rip from katamari damancy. Wow, it's 13 mb in size. o.O

This thing is sticky, and I don't like it. I don't appreciate it.