DVD originally stood for Digital Video Disc (though that has been changed to Digital Versatile Disc), which points to the reason behind its creation. Hollywood studios wanted a better way to distribute movies in digital format, using something smaller than cumbersome video laserdiscs. Advances in compression technology have made it possible to store a 135-minute feature film on a single side of a DVD disc. The compression technology used is MPEG-2. In addition to the video, a DVD disc can hold a digital Surround Sound soundtrack in three to five languages, and subtitles in another four languages (expanding the market for these films on disc). In North America, the Surround Sound standard is called AC3. It is derived from Dolby Digital sound, which uses five sound channels and a subwoofer to deliver true positional sound (hence the designation of AC3 sound as 5+1).

Drives capable of playing DVD discs come in two forms: players you hook up to your TV, and DVD-ROM drives you install in your computer. For computer users, the DVD format can store 4.7GB of data, which is the equivalent of a stack of seven or more CD-ROMs. The format specification also calls for dual-layer formats that hold 8.5GB, and double-sided discs that can hold up to 17GB. The DVD-ROM drives for sale today can read both DVD Video discs and DVD-ROMs. In a year or two, you'll be able to buy DVD-RAM drives that will be capable of writing and erasing data as well -- just like a hard disk. And one of the extra benefits is that the new DVD drives can read your existing CD-ROM and CD Audio discs, though they can't read CD/R discs.