Video compressors, commonly called "Codecs" (for Compressor/Decompressor) are different systems for building video that can be played back on a computer.
The choice of codec is quite easy. The codec that you use will depend on the output desired. For small animations, Cinepak is often the best. It is fast to compress, and runs on virtually any windows based machine. Indeo Codecs after version 3 must be installed on the target machine (although you can download them from Intel free). Indeo 3 is not such good quality, but 4 and 5 are great - however, anything bigger then about 400x300 will not run at more than 15fps. Microsoft Video is pretty low quality, but fairly universal. Uncompressed (i.e. – no codec) will not run any faster than about 2 frames/sec and will take up huge amounts of disk space.
For larger animations, it is usually best to render to single frames for one very good reason. If you are rendering a 2000 frame animation over the weekend and someone turns the power off or the animation crashes, someone will have to pay. If you rendered to single images, you have every frame up until the one when things went awry. In addition, if you need to re-render a section, you can do just the frames you need. However, beware the auto-exposure problem.
If you're serious about animation, then these codecs are not going to be good enough. For TV resolution video at 24-25 frames per second, you will need a dedicated video card to perform the decompression. There are plenty on the market, and they are not too expensive, but they will generally use a proprietary codec that only that card will support. You will however, be able to output your animation to videotape.
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