For us, consumers, yes, MP3 has and will continue to be free to use. However, the MP3 wasn't free for anyone to use. To be able to listen to MP3 files, you had to have a program that could play them. Fraunhofer had patented the encoding and decoding algorithms, so any software that wanted to support MP3 formats had to pay Fraunhofer a license fee.
In addition to free music tracks, YouTube's audio library also includes sound effects. Once again, they're free to use in all your creative work. Whether you're listening to low-quality MP3 files, probably slightly better AAC tracks, or high-resolution audio in FLAC or WAV, it's time to understand exactly what you're listening to and what is the best file format for continuing to listen to music. It's easily the most common audio format, and MP3s are practical for storing music on portable players or tablets and work on almost every playback device.
MP3s encoded at 128 kbps will incur more sound loss than those encoded at 320 kbps (kilobits per second, where each “bit” is essentially a “part” of the song). Now, the institute that initially developed MP3 has canceled its licensing fees, meaning that MP3 is now free. The Vorbis format, often called Ogg Vorbis because of its Ogg container (the best way to think about this is that OGG is the can, Vorbis is the one that attracts the ring) is an open-source lossless alternative to MP3 and AAC, with no patent restrictions. Another lossy format is AAC (Apple's advanced audio encoding), which compresses like an MP3, but is a little more efficient and sounds better.
Now that storage is much cheaper, we'd avoid 128 kbps at all costs, although 320 kbps MP3s still serve their purpose if storage is limited, and they're still a standard in download stores. MP3 has been a pervasive staple of digital audio for decades and is one of the most common ways people listen to music.
