Sorry I didn't notice this thread earlier as it's actually something I can talk about without giving anything significant away
Music
The music format for the game will be Ogg Vorbis. This is due to the licensing restrictions of the MP3 format. Ogg Vorbis is as free as it gets, provides excellent quality sound and there are many freely available conversion tools to be found on the 'net. Adding MP3 support is a possibility post-release when we may actually be able to afford the licensing expenses, however; even if the fees are minuscule I for some reason feel that the money could better be spent elsewhere... like on textures, models and animations.
Music Manager
As for the jukebox, this will most likely not make it for release but we do intend on there being some form of playlist manager (that can reference external Oggs) and will include basic mixer controls (mute/unmute/volume).
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"Debugging is twice as hard as writing the code in the first place. Therefore, if you write the code as cleverly as possible, you are, by definition, not smart enough to debug it." -- Brian W. Kernighan