Well there are lot of codec out there both commercial and free and here is the one new which has almost become the poster boy of codec at least this week when this was written.
Dirac is an advanced royalty-free video compression format designed for a wide range of uses, from delivering low-resolution web content to broadcasting HD and beyond, to near-loss less studio editing.
Originally created by the BBC Research department, the Dirac project has expanded to include companies providing hardware equipment and software for handling Dirac video, as well as an active open-source development group.The name "Dirac" is a reference to Paul A. M. Dirac, British physicist and winner of the 1933 Nobel Prize in Physics. The prize was shared with Erwin Schrödinger, for whom the Schrodinger implementation of Dirac was named.
The real hype is this file format should be very versatile and capable of handling highly compressed web video through HD quality up to almost loss less quality.
This codec has been included in new major release of VLC media player this week that includes support for decoding Dirac video using the Schrodinger library. VLC provides cross platform video playback, encoding and multiplexing functions for a wide variety of media types sure other players will follow soon.
The algorithm is wavelet based, and works on ratedistoration optismisation (RDO) principles. The attempts to balance the inevitable trade off between better compression and distortion in decompressed images, and was originally developed on the basis of MPEG-2. Its full details are available from BBC.
It may even be the next DivX who knows only time will answer.