Transcoding is converting the audio format on the fly when transferring the content from one device to another.
Often people maintain two libraries.
A lossless one for the main rig at home and a lossy one for the portable.
This is a horrible job.
Transcoding is a better way.
Most media players support transcoding.
It is part of the synchronizing.
If your audio on the PC is in a format not supported by your portable, the syncing software translate on the fly to a format the portable do understand.
Likewise you might prefer to have a substantial collection on your portable as well.
Converting from lossless formats to high bitrate MP3 or AAC allows you to do so.