The following (abridged and edited) information on .shn and .md5 files is taken from: "http://thebestofwebsite.com/Bands/Music_Resources/SHN_MD5.htm." by Jeff Costman with additions/corrections by Ryan Mulberger.

The details below reference mkwACT frequently. It is a free .shn  software program that decompresses the shorten files into wav. If you are not familiar with using the software, etree.org has written instructions that should get you started. The official mkwACT website has the software and more.

If you download shn files, you should make a habit of using the md5 checksum file.

1) why?: shn files can transfer with errors:
--SHNs are rather large files. Files of such size are multitudes more prone to making a file transfer error than tiny files, whether it be disc-->hard drive, hard drive-->burning a disc, or internet-->hard drive downloading.

2) Equipment and blank media matters:
--dirty or cheap discs are a likely source of errant transfers.
--some CDroms do not read certain discs as well as others.
--broken/strained downloads, which are much more likely with slow/modem connections are a very likely culprit for shn failures

3) Why your computer doesn't know when an error takes place:
--actually, I'm no computer expert, so I don't know exactly why,
--o.k., sometimes your system will warn you that a transfer failed, or mkwACT will not decode a shn if it is messed up
---but I assure you that often everything looks o.k., but your system is unaware that a shn has taken on a flaw in transit

4) What is the purpose of the md5?"
The md5 tag should accompany any set of shns. It serves as a fingerprint and can be used to quickly sort through the corresponding shns to make sure that no errors have taken place.

5) How do you check the md5?:
Usually, an md5 is made for each disc, and has "fingerprint info" on each track for that disc.
You must have mkwACT installed on your system. Clicking on the md5 will bring up the mkwACT window, and it should display the course of searching through the shns, as well as any error info.  You must have the md5 in the same folder as the corresponding shns that you wish to verify.

6) What to do if a shn file transfer fails the md5 verification:
--if it was a download, try downloading that file again
--if you can, repeat the transfer if it was from a disc. If you have to, try a different CD-Rom to read some skeevy discs that give you problems.
--if it was during a burn, reburn, as you've just gained another coaster...it might be the disc's fault