Just had a look at something else...it seems that MP (or MPEG) is a compression format, its what is used to compress data onto your PC otherwise the file would be very very big.
the 1 2 3 and 4 is the 'Layer' number.
In effect from what I have read, MP comes from MPEG (a compression format) and the number refers to the 'Layer' or in lamens terms its number 1,2,3 and 4, --- in sequence.