Basically, harmonic distortion is the noise that every piece of gear in the audio chain produces. It's refered to as a percentage of the incoming signal. When you read .02% THD it means that .02% of the outgoing signal wasn't present at the input. THD is a bad thing, but most of today's gear has values much less than 1%. I think what that fellow might have been referring to is distortion on a different level. If you record at too high of a level, the peaks of the signals get clipped off (hence the 'clip' light on most mixing boards) and you wind up with a nasty sound. Guitar distortions use this on purpose to get that very familiar sound we hear every day. In recording we want to add distortion on purpose, not by accident. Unless you are using some really old or malfunctioning equipment, I would start looking at your recording and mixing methods first. Keep in mind that distortion, of any kind, can be introduced into the audio signal at any point. Any piece of gear from mixing boards, to tape recorder, to headphones, can and will add a bit of distortion. The better the equipment (usually directly related to $$$) the less accidental distortion.
