I’ve always seen Dolby Stereo logos on CDs or cassettes but I don’t know the difference with normal stereo. I only know Dolby surround or Dolby Atmos which is spatial audio like 5.1 and 7.1 .
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Stereo sound in general means more than one channel of audio, often left ear right ear. It gives the illusion of “3D sound”.
The 5.1 and 7.1 mean that there are either 5 or 7 audio channels plus 1 low frequency channel for the subwoofer. The 5.1 channels are front left, center, front right, surround left, surround right, sub. 7.1 adds a left and right height channels, usually positioned higher up than the fronts, or sometimes a direct left and right channel.
Seeing 5.1 or 7.1 on a piece of media means that it has its audio separated out to utilize those different channels properly. So a 5.1 or 7.1 audio version of Star Wars might have the audio mixed in such a way that a starship flying past sounds like it actually went from one side to the other with its sound effects.
Edit: reading comprehension is hard. Dolby has their own methods of audio compression that differ from MP3 and other lossy methods. Basically, they do different math for the compression. Not enough of an audio nerd to parse the differences unfortunately.
Dolby stereo was created to eliminate background sounds from the recording. There are some artists whose songs sound different when played in Dolby vs regular stereo. Certain frequencies are blocked out by Dolby, which, in some cases can eliminate a whole instrument from the recording.
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