guys, registered to reply to this.... (got caught by my MD google alert)
a high-end MD setup will record at nearly 20bit resolution, and 48khz sample rate, so it makes a better than CD sound if you're not offended by compression. Type-R or better roundtrip's will introduce very little in terms of audible artifacts. (I wouldn't personally recommend using an ATRAC chip less than v 3.5) For the time this was a very nice recording system.
anyhow i'll be interested to see what you guys who are dusting off the equipment think.
Edit 1: I believe I meant less than v 4.5 (it was a long time ago!)
Edit 2: I think was right the first time, don't go less than 3.5 :-)
Edit 3: gah, after a trip down memory lane it seems the encoded sample rate is the typical 44.1khz