In normal “Stereo” mode, MP3 stores a separate Left and Right channel, though bitrate can be distributed between Left/Right as needed. In “Joint Stereo” mode, there are still two channels, but they are called Mid and Side. Before the compression, Mid/Side are computed from Left/Right. While Mid stores the common portion of the Left/Right channels, Side stores the difference. After decompression, Left/Right will be reconstructed from Mid/Side.
The advantage of “Joint Stereo” is that, usually, the Left/Right channels are pretty similar, so most information will be in the Mid channel and only very few information in the Side channel. This means that, with “Joint Stereo” mode, the redundant part doesn’t have to be stored twice! This means that “Joint Stereo” can use the available bits more efficiently than normal “Stereo” mode does - provided that the Left/Right channels are somewhat similar.
The rule of thumb is that “Joint Stereo” is advantageous at lower MP3 bitrate, while it’s less helpful on higher bitrates. Also the advantage depends a lot on the content. Anyway, with the LAME MP3 encoder you don’t need to worry. It uses “Joint Stereo” by default (-m j), but still switches between Left/Ride and Mid/Side mode dynamically, i.e. it always picks the “best” mode for every frame. You can force Mid/Side mode (-m f), but that’s not recommended…
JOINT STEREO > is the default mode of encoding. jstereo means the encoder can use (on a frame by frame basis) either L/R stereo or mid/side stereo. In mid/side stereo, the mid (L+R) and side (L-R) channels are encoded, and more bits are allocated to the mid channel than the side channel. When there isn’t too much stereo separation, this effectively increases the bandwidth, so having higher quality with the same amount of bits.
Using mid/side stereo inappropriately can result in audible compression artifacts. Too much switching between mid/side and regular stereo can also sound bad. To determine when to switch to mid/side stereo, LAME uses a much more sophisticated algorithm than the one described in the ISO documentation.