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Original Sound Quality (OSQ) is an audio file format developed in 2002 by Steinberg Media Technologies GmbH and implemented e.g. in their audio editing software Wavelab 4 (and following releases) for lossless audio data compression.
In combination with good source material this format allows compression rates up to 50%. Because of that it is not comparable to other audio formats like MP3, which reach compression rates up to 90% because of their lossy compression algorithms. Therefore, OSQ is used rather for archiving then for daily use.
OSQ is a proprietary format developed by Steinberg that is generally speaking not supported by other audio software tools. A possible alternative to OSQ might be the free codec FLAC.