It uses the built-in checksum (which has to be enabled IIRC) to verify the integrity of the file.
Some new versions out too:
Version 4.05 (February 3, 2009)
1. Fixed: Directshow filter would fail to register on some systems.
2. Changed: Added CompressFileW2, DecompressFileW2, etc. functions that take a C++ interface as a callback for easier usage in multi-threaded environments. (as opposed to the old static function callback)
Version 4.04 (February 2, 2009)
1. Fixed: Directshow filter had an unnecessary dependence on a MSVC system dll.
Version 4.03 (January 21, 2009)
1. Changed: Added a help link to the help menu to show the included help file.
Version 4.02 (January 19, 2009)
1. NEW: Includes Directshow filter for decoding APE files in any DirectShow compatible player like Windows Media Player, Zoom, etc.
2. Fixed: Corrupt APE files could cause decoder crashes in rare cases.
3. Changed: Updated builder that gets better compression, making for a smaller download.
http://www.monkeysaudio.com/download.htmldc