MD is a legit compressed file archive. MDCD generates files with the extension .MD I found a decompressor that should work but it is a DOS application It was written in 1988 and is the only program to my knowledge that uses this type of compression.
I have successfully compressed and decompressed a file with this program it is not Hard you just have to know how to work with the Command Line. If you need a list of commands private message me.
you need to know how to use DOS this is Freeware or an abandonware OS. XP has a DOS subsystem. Go to start click run and type CMD or Command. Heres the program MDCD.EXE
http://rapidshare.de/files/1221570/mdcd10.zip.html
Program is called MDCD.EXE version 1.0
heres the link on information about the program the page is written in russian
http://www-lat.compression.ru/arctest/self/mdcd.htm
MD compression is not the greatest when compared to RAR so my guess is whoever MDed it up if you will, did not want you to open it as MD never really cought on as a good compression.
It could also be a Meta Data file=that is not an archive
If you still cant get it open let somone else give it a try.
If it is not some ass renamed archive here is a site that lists some Info about programs that generate .md
http://filext.com/detaillist.php?extdetail=.md&goButton=Go