DiVx 5.02 PRO
This is without question, the best video codec available. And, will be even better when mpeg-4 video will have audio support. To date, encoded videos have to be saved into .avi format to have sound interleaved. Still, you can get a full movie with mp3 sound on a single cd-r. Kazaa is a great way to share your favorite DiVx movie.
Below are a few links to help you get started.