Once upon a time in the faraway land of rec.video.desktop, Clover
<cloverleafland@mail.hongkong.com> said:
Technically there isn't much difference between them, they are both
implementations of MPEG4, and any MPEG4 codec should be capable of
playing videos made by either. The way Xvid came about was that the DivX
team decided to try and make money from their codec by using adware etc.
Some of the programmers disagreed with this and split off to continue
producing a free open source codec which they called Xvid. If you use
Linux then I think there is also a codec called ffmpeg you can use.

The codec itself only determines the format of the video data stream.
The type of container file which holds the video & audio data streams is
determined by the video editor or converter which is using the codec.
Most such programs happen to make AVI files. A .divx file is in fact
just a rebadged AVI file. There are also programs that can produce other
file formats such as OGM (Ogg multimedia) which is a more flexible
format that allows multiple audio and subtitle streams.

-Shez.
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