It's an acronym that stands for Musical Instrument Digital Interface. That's a program that acts as a go-between for an instrument and something that creates the sound. Sort of like running a guitar through a computer and then out a speaker.
A midi file over the Web works as a program that runs the sound card. The midi file is not simply read and reproduced like a .wav or an .au file. The midi file sort of "plays" the sound card. It tells the sound card what note to produce and for what duration. Put enough of these notes together and it sounds like music. Most of the midi music that we hear sounds like a bad little Casio keyboard. Probably because that's the level at which our sound card can reproduce the sounds. Higher level sound cards can reproduce the MIDI just as clear as any instrument could. It's really amazing when you hear it.
