Xvid (formerly "XviD") is a video codec library following the MPEG-4 standard, specifically MPEG-4 Part 2 Advanced Simple Profile (ASP). It uses ASP features such as b-frames, global and quarter pixel motion compensation, lumi masking, trellis quantization, and H.263, MPEG and custom quantization matrices.
Xvid is a primary competitor of the DivX Pro Codec. In contrast with the DivX codec, which is proprietary software developed by DivX, Inc., Xvid is free software distributed under the terms of the GNU General Public License. This also means that unlike the DivX codec, which is only available for a limited number of platforms, Xvid can be used on all platforms and operating systems for which the source code can be compiled.
Read more about Xvid: History, Patent Issues, Sigma Designs Controversy, Playing Xvid Encoded Files, Encoding Applications