Now that digital video recording and network video have entered the mainstream, attention has turned to methodologies for transmitting and storing digital data in the most effective manner to achieve lower costs and desired performance. This white paper will encompass a wide-ranging discussion of digital video compression methodologies—particularly Motion JPEG (M-JPEG), MPEG-2, and MPEG-4—and the most appropriate applications for each. The paper will also focus in on MPEG-4, as this compression standard has recently gained in popularity, yet remains largely misunderstood. For this reason, we will explore the hype and reality of MPEG-4 and try to better understand what it actually offers to users.