This is in the tradition of many geek acronyms, including:
LAME endured some legal difficulties regarding Fraunhofer's patent on certain key algorithms involved in MP3 encoding, specifically U.S. Patent 5,579,430 and foreign counterparts. These patents were intended to prevent anyone from being able to create an MP3 encoder without paying licensing fees to Fraunhofer, something that is difficult to enforce for an open source program whose users live in dozens of countries, many of which do not recognize patents on algorithms.
At one time, LAME used patches against the ISO demonstration source, which is distributed separately. That ISO code had a restrictive license and implemented some clearly patented algorithms but was available without charge. However, in May 2000, the LAME project reimplemented the last of the ISO source code; compiling recent versions of LAME no longer requires the ISO source code.
Many people think that LAME is the best mp3 encoder available today.
See also: Vorbis-An alternative and free audio codec
wikipedia.org dumped 2003-03-17 with terodump