The process of bringing the peaks up to 0db has 2 main problems....
1) raising the noise floor -- raising the level digitally is a very simple process - simply multiply the samples by the amount needed to move the peak level up to 0db (or whatever value is selected)
So that's exactly what happens - if the multiplier value is 1.5, then each sample is multiplied by that amount and the signal level gets raised. 2 issues -- digital arithmetic operations affect the integrity of the original samples and round-off error can occur in the multiplying process - this has the potential for degrading the sound. The other issue is that the noise floor of the original signal also gets raised - making it possibly much more audible.
2) the relative balance between songs -- in an album context, normalizing makes no sense.
Here's an example -- let's say Joe Novice has a cd of 3 songs: 1 - hard rock, 2 - soft ballad, 3 - even harder rock.... when he mixes it he finds that the hard rock tunes peak at -2db from full-scale, while the ballad is -6db away. When listened to in sequence (hard - soft- harder), the hard rock tune jumps out (in a good way), the ballad then comes in appropriately softer, then the harder rock tunes jump out even further (also in a good way).
Now his self-proclaimed engineering guru buddy (who knows all the tricks and can't imagine why HE'S not the next George Massenburg) mentions that "you NEED to normalize, man -- otherwise it just sucks!" So Joe Novice does.... And listens to the results in the same sequence... hardly any change in the first tune -- ah - here comes that soft easy ballad - BANG! ...that ballad snare jumps out and kills the entire mood of dynamics between the first and second song... hmmm... 3rd song comes on and it now sounds weak.
What the fuck??? Could his "knowledgeable" buddy have been wrong???? Yes.... the guy's an idiot!
What Happened???
Normalizing raised the level of the soft ballad to almost that of the harder-edged tunes, destroying and dynamic buildup or mood that was created by the original contrasting levels. This is EXACTLY the kind of dynamics you WANT in a sequence of songs - and in one quick DSP action - you killed it completely.
This is the reason "normalizing" is not a pro's tool, but more "rookie buzzword."
JUST SAY NO to normalizing!
Bruce