well, i emailed Onkyo and this is what they said...
Compressed music loses a substantial amount of bit information at
higher frequencies, so the Music Optimizer technology works to overcome
this limitation and enhance audio quality."
Low bit rate MP3 and AAC files chop pretty much everything over 16 kHz. As you increase the bitrate the cut-off point for the highs is increased and at about 256 kbps, it fairly well preserves everything to near 19 kHz.
Considering the fact that as we age we lose the ability to hear high frequencies (even without damage or disease) a reasonably high bit rate (I tend to use 192 kbps because it is good enough) doesn't lose all that much that you would readily notice anyway.
But remember, you can't unbake a cake or unscramble an egg. You can't
put back what is now missing because you don't know what was there in the first place. What these algorithms essentially try to do is resample the audio on the fly and add back overtones (multiples of the fundamental frequencies that remain). In other words, just like 'upsampling' the algorithm makes intelligent guesses to add more samples than originally existed.
If done well, I suppose the changes might be noticeable for low bit rate or low quality files, but really it is just 'different' - not necessarily 'better'.
