one silly question: why has AAC also got the mp4 extension? Is it the mp4 format, say the sequel to mp3?

an explanation would be nice thanks!

AAC is usually found in an MPEG-4 container; so MP4.

MP3 is MPEG-1 audio's layer 3, so MP3.

MPEG-3 was meant to be for HDTV, but MPEG-2 was found to be adequate, so MPEG-3 was never made, AFAIK.

MP3 = MPEG 1/2 Layer 3
is an Audio Codec
see http://en.wikipedia.org/wiki/Mp3

MP4 = MPEG 4
contains many media formats (aac is in MPEG-4 Part 3), a media container (MPEG-4 Part 14) and some more stuff. This container may be used to wrap around aac coded audio data. In this case you should use the mp4 extension.
see http://en.wikipedia.org/wiki/MPEG_4

Added some wikipedia links

There is also MPEG-2 AAC and it's not much different than MPEG-4 AAC. MP4 is the extension for the standard file format (as defined by MPEG-4 Part 14) that commonly is used to hold AAC.

MPEG-4 AAC just adds PNS and LTP to MPEG-2 AAC I think.

When MPEG-4 AAC was new, all that was different from MPEG-2 AAC was the header, IIRC.

Can someone clarify if the difference between MPEG 2 AAC and MPEG 4 AAC is a different codec?

Ie would you need a different codec to encode MPEG 2 AAC than MPEG 4 AAC? I thought the codec was different to the container.....

Thanks!

the codec is the same. It just contains more tools, like shown in that graphic by eevan.

MPEG-2 AAC used either a RAW stream (no container format), ADTS or ADIF. MPEG-4 AAC uses ADTS, ADIF, or the MP4 container (the latter being the usual.
There's a small difference in the ADTS (or ADIF? or both?) between MPEG-2 and MPEG-4, but that's all.