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DivX ;-) MIND
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Non-Technical Explanation
DivX ;-) is a new video compression format. What that means, is that similar to Mp3 and the way that large sound files are compressed into a smaller file while maintaining good quality audio, DivX ;-) allows us to take a very large DVD movie and shrink it to about the size of a CD-R (650 MB) while keeping a large amount of the quality.
Technical Explanation
DivX is a hacked version of Microsoft's MPEG 4 compression standard. Transformed by intelligent coders into the version that we use every day to encode movies ;-) Similar to the way that Mp3 takes ambient sound away from the source, DivX takes away those little pieces of information that are not really noticeable to the human eye.