LAME originally stood for LAME Ain't an Mp3 Encoder. LAME started life as a GPL'd patch against the dist10 ISO demonstration source, and thus was incapable of producing an mp3 stream or even being compiled by itself. But in May 2000, the last remnants of the ISO source code were replaced, and now LAME is the source code for a fully LGPL'd MP3 encoder, with speed and quality to rival all commercial competitors.
LAME is an educational tool to be used for learning about MP3 encoding. The goal of the LAME project is to use the open source model to improve the psycho acoustics, noise shaping and speed of MP3. LAME is not for everyone - it is distributed as source code only and requires the ability to use a C compiler. However, many popular ripping and encoding programs include the LAME encoding engine.