From the Advanced Video Coding (AVC) Alliance: AVC is the new generation compression algorithm for consumer digital video. Compared to the current industry standard MPEG-2, AVC is at least twice as efficient at all bit rates. This means that AVC will open up channels to the end user that were previously closed for digital video services at the right quality. AVC offers significantly higher video resolution at the same bit rate, or the same video quality with half the bit rate that is required for MPEG-2. This will enable attractive new products and services to be introduced by all players in the value chain.
AVC is the result of work started in the ITU and in MPEG, completed in the Joint Video Team (JVT) made up from experts of the two organizations. The algorithm is published as H.264 by the ITU, while ISO/IEC published it as MPEG-4 Part 10.
The primary application of AVC is in new video services where MPEG-2 is less suitable, especially where limited bandwidth is available. Examples are mobile applications, IPTV over ADSL and HDTV in Europe, where spectrum is particularly scarce. Recently, the DVB Steering Board approved the AVC implementation guideline specification, which was prepared by the Digital Video Broadcast (DVB) Technical Module. The specification has been sent to the European Telecommunications Standards Institute (ETSI) pending formal
For more information, see Wikipedia's H.264/MPEG-4 AVC.