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I don't think a single AVR microcontroller can be used for this task. The AVR can be used to read the information from a storage medium with FAT implemented, and to control the mp3 decoder.
MP3 decoding is very complex, and can be implemented only on DSP (at least real time). The AVR has limited resources for that, and is quite slow, even for the data transfer of high bitrate mp3s (256, 320kbps). So you need at least an AVR microcontroller and an mp3 decoder chip.[/url]
yes i have seen that page too.. but do you really think an AVR will be powerful and fast enough to actually enable us to make a mp3player which is real-time functional?? i must say i have to agree with eugen when he says that mp3 decoding is no simple process..