MIDI Files do not contain sounds. They are not audio recordings.
They contain 'instructions' in digital form.

  MIDI-FILE'S ARE LIKE ANY OTHER FILE ON YOUR COMPUTER. They are collections of digital bits and pieces that contain information, that is interpreted by a musical instrument of some kind and the piece of music is "played back" by the instrument.

                       A midi-file is not a 'recording' as such.

To help you understand this, most are you will be familiar with the old pianola (Remember all that pedaling?) A pianola is an instrument that can make sounds, but it needs someone / something to tell it which ones to make! The paper pianola roll with those little holes in it can't play music itself, but it contains the information to tell the piano what to do.
                                  This is what a midi file is.

            A midi file is the 'paper' roll' that tells the midi instrument ('the pianola') what to play. The instrument can either be a electric piano like I have (which is connected up to computer) or a sound-card inside the computer. 

A SOUND CARD is basically a collection of stored sounds which the midi file can instruct to reproduce in various ways. (Actual recordings of sounds (from CDs or MP3s) can also be made on a computer, but they take up lots of room on the hard drive!) Midi-files only contain bits of instructions and are therefore quite small and easy to transport around the internet.

 Sometimes, the sounds may be in a separate 'sound module'  ('box') outside the computer.
It does the same thing as the sound card. I have one of these on my piano now

Back to Grandma's pianola: If her piano was badly out of tune, then you got an out of tune performance. Put the SAME piano roll on a fabulous piano and you got a fabulous performance. 
                  Just the same with a soundcard: The quality of the sound will depend on the quality of the soundcard. I have spent a fair bit of dough getting a soundbox with pretty good sounds. Don't be surprised if you start to listen to a midi-file at home and they sound a bit more 'dinky' than they do at my place. Once again, some settings may help there but it might just be the low quality of your soundcard. 

It is still worth having a look at though, even a 'dinky'  piano sound can still be useful for learning songs etc.,  (I went around Australia once with as a member of a professional a-cappella group, and all we had with us was a portable keyboard that most kids would turn their nose up at, but it worked.  It gave us the notes and was good enough for rehearsal.)

I'm a singer. This techie stuff is all very interesting for a computer nerd, but what use would midi-files be to me?

   Some extra information:
I'm often asked how to make a recording of a MIDI file,
so that it can be played on an ipod/ iPhone or a CD player.
i.e.: They want to know how to make a recording of a MIDI file
that they already have on their computer.  >>>   Follow this link

Try these links:   
from How The Internet works  MIDI (Musical Instrument Digital Interface)
or try this:     What Is This MIDI Thing? or  What is MIDI?     
     I also have some books you can borrow.    Geoff