I mainly wrote that to explain to the ricey-kids who install crappy, underpowered amps in their cars and wonder why their speakers blow when they turn up the volume. Then they go out and buy a crappier and less powerful amp and kill their speakers even faster the next time.
Clipping is bad. It sounds bad, and it's bad for the equipment dealing with it.
In short, it's when a source signal is "amplified" too much and the recording medium (in this case, digital, lossy compressed audio) can't handle the dynamic range of the audio, so it clipps the crests of the soundwaves.
I havn't finished it completely and there are some minor errors pertaining to how transistors overload and stuff but the core concept is there.
Sorry, I'm a geek