Pretty good, if the sales of CDs and iPods are any indication. On a CD, the signal is sampled at 44.1 kHZ and quantized to 16 bits (65,536 distinct levels) and the quality of the resulting sound is such that, in just a few years, it completely replaced the phonograph record as the primary vehicle for recorded music.
At least for most people. Some dedicated audiophiles with golden (or platinum) ears claim to be able to hear all kinds of bad things in CD sound and proclaim that it is decidedly inferior to a good (or even an average) vinyl record. We've seen that all kinds of bad things can indeed happen to a signal when it is digitized, but if we use a high enough sampling rate and a high enough number of bits, the damage can be quite small. Lower sampling rates and fewer bits mean more damage, but some applications, such as digital telephony, require a much lower data rate and are willing to accept lower quality in exchange. Let's listen to (as we've already seen) some of the things that happen when that quality becomes too low.