Codecs have come a long way over the past few years, as have the microprocessors they rely on to do the compression work. Even so, in most situations you'll need to choose between real-time delivery and high quality. Contrary to what codec vendors would have you believe, the best-quality video can't be delivered in real time using off-the-shelf computing hardware--you must have hardware that's specially designed for video compression.
Microsoft's Windows Media 9 and the ISO MPEG-4 standard are two formats that are gaining a lot of attention. Both do a good job, whether or not real-time delivery is involved--and both have their proponents and detractors. What differentiates them is their degree of openness. MPEG-4 is an open standard; WM9 is created and controlled by one vendor--Microsoft. Both MPEG-4 and WM9 are included with MPEG-2 as compression standards for high-definition DVDs.
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Shrinky Dinks
On the encoding and compression side, there are several factors to consider. At the head end, do you want to store the video you're delivering for later use as video on demand, or will you stream it just once in real time? If you need to store it, Fibre Channel, SCSI and its big brother, Ultra SCSI, are synonymous for storage; but SATA (serial ATA) is making inroads because it's cheaper than SCSI, and its drives offer greater capacity.
In addition to drive throughput, you need to think about the network and hardware capabilities of the server. The hardware is less of an issue for sending out just one video stream than it is for delivering several simultaneous streams of different video. Streaming video can be sent in unicast (one-to-one) or multicast (one-to-many) sessions. Multicast is easier and more efficient in terms of server hardware and bandwidth, but if video on demand is in your future, you shouldn't rule out unicast.
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