Yes and no. You can drag and drop any MP3 files onto the VAIO Music Transfer (also known as Music Move) window and it will transfer the files to the device without the need for SonicStage. You cannot simply drag MP3s directly onto the VAIO Pocket (which shows up in explorer). You can if you simple need to store them but they won’t play.
VAIO Music Transfer does encapsulate the MP3 and renames it to a OMG file. I suspect it does this to keep people from copying MP3s from system to system and to keep track of additional data. It DOES NOT transcode the file at all though so there’s no compression or recompression going on.