What Audacity can't do
Like any program, Audacity has its limits that can't be broken. Each of the following would be best done in a different program.
1. Audacity can't effectively tag MP3s
Look at Audacity's tag editor and you'll notice some missing fields, especially the cover art field. Use a different program like MP3Tag (free for Windows) or ID3 Editor ($15 for Windows and OS X) for tagging your audio files.
2. Audacity can't make good podcast MP3s
LAME is the best MP3 encoder! But it's the best for music, and only when you use variable bitrate (VBR). This isn't very compatible for podcasts, and using LAME any other way produces poor quality MP3s. That's why I recommend that you export as WAV and create your MP3s with iTunes.
3. Audacity can't make music
Audacity can import MIDI files, but it won't be a friendly interface like GarageBand or other music-making apps. Audacity also lacks loops, sequencers, and a host of other features found in other apps.
4. Audacity can't publish or share [via Bob Boufford]
Export is your only option with Audacity. There aren't any one-click publishing or sharing options. You'll have to do that yourself.
5. Audacity can't apply real-time or editable effects
If you apply an effect in Audacity, you have to apply it to your audio before you hear it. And once applied, you can't change the settings later unless you undo and re-apply.
5 1/2. Audacity can't get any cheaper [via David Dell]
You don't have to pay to use Audacity or its plugins. But do remember that “free” comes at a price: the cost of your time to do what might be easier or quicker in paid software.
What Audacity doesn't do without workarounds
Audacity has limits, but they can be bypassed with plugins or tweaks.
6. Audacity doesn't record multiple devices
Audacity can record as many tracks as a single device supports. But if you want to simultaneously record multiple devices, you'll have to have special drivers on Windows (I don't know of any) or make an “Aggregate Device” on OS X.
7. Audacity doesn't offer multiband compression
Audacity offers an audio compression plugin, and I always suggest Chris's Dynamic Compressor. But if you really want a multiband compressor, you'll have to look at another plugin—C3 Multiband Compressor. It similar to Adobe Audition's multiband compressor, but C3 is free and works with Audacity.
8. Audacity doesn't support WMA, AAC, or other formats
With the FFMPEG plugin, you can import and export M4A (AAC), AMR, WMA, and AC3.
The show-stopping big one
9, ANY audio-editor can't make bad audio sound good
No matter how much you spend on kitchen equipment, you can never make poop brownies good. If you give Audacity or any other audio-editor bad audio, you can't make it sound good. You can enhance what you record or even fix some glitches (like removing noise). But there's no replacement for getting good audio in the first place.
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