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What does 'transcoding' mean?

When you upload a track or video in formats other than mp3 and mp4, you'll see a working symbol and the word transcoding on that file for a short period: 

This means DISCO is creating an mp3 copy (if it's audio) or an mp4 copy (if it's video) for better playback.

The original copy is still kept: it will be downloadable alongside the mp3/mp4 copy on the file's public download page, which you can access and share by clicking get url from the track or video menu. 

And you can choose which format you want to send when saving a playlist by accessing the Formats menu when saving your playlist.