Distortion is the Jekyll and Hyde of recorded music. Strictly speaking it's a fault, but the terrible truth is - we love it.

My personal take on being a Mastering Engineer (with a few hints and tips), Music, DVD and Blu Ray Authoring, the CD Loudness Wars, Surround-Sound and anything else that pops into my head...
Distortion is the Jekyll and Hyde of recorded music. Strictly speaking it's a fault, but the terrible truth is - we love it.

If Lars Ulrich, Metallica's drummer, thought that his comments to Blender.com about the distorted sound of "Death Magnetic" would put an end to the controversy, he was sadly mistaken. 
"Listen, there's nothing up with the audio quality. It's 2008, and that's how we make records... Of course, I've heard that there are a few people complaining. But I've been listening to it the last couple of days in my car, and it sounds fuckin' smokin'."
"The Internet gives everybody a voice, and the Internet has a tendency to give the complainers a louder voice. Listen, I can't keep up with this shit. Part of being in Metallica is that there's always somebody who's got a problem with something that you're doing: 'James Hetfield had something for breakfast that I don't like.' That's part of the ride."
"Somebody told me about [people complaining that the Guitar Hero version of Death Magnetic sounds better]. Listen, what are you going to do? A lot of people say [the CD] sounds great, and a few people say it doesn't, and that's OK."
"I will say that the overwhelming response to this new record has exceeded even our expectations as far as how positive it is. So I'm not gonna sit here and get caught up in whether [the sound] 'clips' or it doesn't 'clip.' I don't know what kind of stereos these people listen on. Me and James [Hetfield] made a deal that we would hang back a little and not get in the way of whatever Rick's vision was. That's not to put it on him - it's our record, I'll take the hit, but we wanted to roll with Rick's vision of how Metallica would sound."
This post is partly my attempt to publicise the damage that the so-called "Loudness Wars" are doing to music. In a nutshell, the continuing arms-race for "loudness at all cost" is now dramatically damaging the music we listen to - even in a traditionally loud, distorted genre like rock. As a result we are given squashed, lifeless and often unpleasantly distorted products to listen to. These are less exciting, less involving, less impactful and ultimately fatiguing to listen to.
As you can easily see, the CD version on the bottom has been heavily compressed, limited and/or clipped, and sounds massively distorted as a result. In fact, despite the appearance of the waveforms, the CD version still sounds louder, even though it's level has obviously been reduced in the sample I was sent - presumably to match the levels for comparison purposes.
To be completely open and up-front about everything, the files were mp3s - not the best sources - and I haven't yet heard the album myself(*) to confirm the sample is a truly accurate representation, but the samples clips on iTunes are enough for me to be very confident. No mp3 encoder would do this to a file.
(*) Since posting this I've had a chance to make the comparisons, and can confirm that the mp3s accurately represent the released CD in terms of the overall sound, degree of distortion etc. Details here.
I have removed the link in the comments from my last post to the samples which were uploaded (not by me!) to avoid any possible legal issues, but if you are curious to hear the difference for yourself there is a video on YouTube which I link to in this post which demonstrates it pretty clearly.
And of course, this doesn't answer the questions about how, why and where this amazing feat of sonic demolition was achieved - however Ted Jensen says it wasn't him, and I'm inclined to give him the benefit of the doubt - and his colleague, Chris Athens, says on the Gearslutz Mastering Forum thread:
Rick Rubin and Metallica are solely responsible for the end product. They gave the directions, they approved it. They are not rookies and no one at the label can ever bully these guys into anything. Both parties are 800 pound gorillas in the music industry. These guys are smart and in control. You and I may not like their taste, but it's not a Chris Athens record. It's a metallica record and this is what they want to give the record buying public. Only Metallica and Rick know why it sounds like it does.
Those of you keeping an eye on the "Loudness Wars" may be interested by current discussions on the Metallica forums. Fans have been complaining bitterly about the extreme clipping distortion on the new album "Death Magnetic" - it's clearly audible on the previews in iTunes, for example - and the finger has been pointed at Ted Jensen, head engineer at Sterling Sound, who mastered the album.I’m certainly sympathetic to your reaction, I get to slam my head against that brick wall every day. In this case the mixes were already brick walled before they arrived at my place. Suffice it to say I would never be pushed to overdrive things as far as they are here. Believe me I’m not proud to be associated with this one, and we can only hope that some good will come from this in some form of backlash against volume above all else.
I just skipped through 3 random songs and the highest I saw on the meter was -4,3 dB RMS (-1,3 RMS in AES17 norm), looking at the realtime RMS meter with Wavelab's default time constants.
Wavelab's global analysis (with its default time constants) reports -2,93 RMS [+0,07 in AES17] RMS in one of those tracks.
Most of the album (looking at the meters) sits between -7 and -5 (between -4 and -2 in AES17).
You remember that popular myth that mastering will "make your record sound the same across different systems"? I now get the point. Death Magnetic (although apparently not introduced through mastering) sounds thin and distorted on my laptop speakers. And it sounds thin and distorted in my mastering studio. There's always a silver lining