@TehSkull it might not be so much more data in less space but what appears to be the same data to the human eye in less space and still hopefully decode it at 24,25 or 30 fps depending.
I'm not gonna lie, when I wrote my post out, I was drunk (see my thread of me getting my L and drinking), and even then I feel like with my post I was fairly thorough and it made sense to a lot of people. HOWEVER! I'm having a lot of trouble understanding your post. I'm maybe 17 beers in and a little bit buzzed, but fuck, your post just confused me and made me feel like my dick is smaller than yours. That's not to say that your post didn't make sense, I just don't under-fucking-stand it where as someone else might. (Also excuse my language as I've been watching A LOT of Penn and Teller.
Sorry- I do a lot of video encoding and tried to learn most of what there was to know on the "how it all ticks" level (largely at the cost of the "language of cinema" side of things) and I am never quite sure what to elaborate upon and what to not to when it comes to these sorts of discussions.
Mini essay mode then.
There are many video standards in this world though MPEG has a lot of the market (what the latter half of my post was lamenting upon). They have a variety of standards available though aside from the now obscure MPEG1 video (you met it if you used DPG on the DS and most likely if you have a video with the extension .mpg) and MPEG2 (DVDs and some aspects of blu ray- though not a lot of blu ray use it these days) most fall under the MPEG4 umbrella
Chiefly you would have met
MPEG4- part 2. The names for all the MPEG stuff gets a bit confusing- generally the actual standards are broken down into parts which themselves have various implementations.
MPEG4 SP - on some of the very oldest DVD players that played non DVD video you might have met this.
MPEG4 ASP - this would be divx/xvid and the sort of thing that usually gets crammed into AVI and your 700 meg films.
MPEG4 part 10 aka AVC aka H264 with the most prominent open source encoder being X264 (that it mops the floor with most other H264 efforts is perhaps a different discussion). This is everywhere nowadays though officially blu ray does support it.
Digital TV varies across the world it seems so I am not going to even try lining things up there.
This H265 stuff is technically a new standard though I am not sure what the official name is to be (HEVC, H265, MPEG-H and various permutations of the lot depending upon where I go though most are accepted).
Generally the larger the numbers/further down the lists you go the less space it takes to encode a similar quality video at the cost of increased resources to decode it* though there are oddities here and there (more commonly at extremes- MP2 and MP3 audio being a good example- MP3 is generally superior but there are times like lower bitrates where MP2 does better).
*your phone probably decodes H264 but it is extremely unlikely it does it all in software. This troubles things as not all hardware supports all of the standards- ipods were notorious for not supporting the better parts of the AAC audio standard.
This is why I felt the need to mention that your 700 meg DVD rip being compared to later formats was at best a bad comparison. Added onto this those 700 meg rips have all sorts of restrictions applied by the scene (
http://scenerules.irc.gs/ has various scene rules), nominally for good reasons (700 megs is the size of an 80 minute CD, many of the other rules are to allow older hardware driven decoders in DVD players to work- if you have seen a nuke for custom quant then that would be why) but it still drags down the overall quality of the film. In many ways I reckon if old youtube made internet video a byword for awful quality then the scene certainly did XVID/MPEG4ASP a number of disservices (though if it did not exist I doubt it would have been half as popular as it is). Being animated and subject to a whole host of slightly different problems I am hesitant to make the link but if you have seen some of the nicer nowhere near to 350/700 megs stuff in the anime world you can glimpse some nice stuff, the addition of 550 meg TV shows helped and the jump to H264 also saw the various numbers change, this meant a jump from where XVID stuff was about the limit of watchable to scene style H264 being quite comfortable (with the added perk of H264 encodes not being reduced in resolution quite as much).
Of course I should note X264 being awesome again- every GPU encoder I have used pales when compared to X264 and for my money spits out something equivalent to MPEG4 ASP even if it is quicker (though X264 is no slouch). You start fiddling with advanced options (and in doing so rapidly turning it from something most things will decode to just your PC if you set it up properly) and it only gets better.
Industry nonsense is boring though so on to what you said
There are various methods of encoding a video but to get to the level where most of the discussion for this to make complete sense will take ages and is tedious beyond belief. When people ask why we have not reverse engineered mobiclip I usually point at
http://www.cmlab.csie.ntu.edu.tw/cml/dsp/training/coding/mpeg1/ which is for MPEG1- this stuff has now had the better part of 25 years of computing development and some of the best programmers, scientists (of every shade) and electronics experts going at full pelt with the added bonus of patent/businessman induced weirdness.
Generally there are two broad classes of compression method
Interframe - screaming by at twenty something frames a second most things match the next frame quite well. If you have ever seen a high speed scene deteriorate into squares (blocks if you will- hence deblocking you might have seen in post processing filters) you have seen aspects of these at work.
Intraframe - broadly speaking one pixel is very similar to one next to it. This is what also custom quant deals with (generally people are less inclined to notice errors in different parts of the image so you can lose quality somewhere but keep it somewhere else- different types of film and different ideas on the subject saw many made, many of which are better than the basic standards).
There are also things like qpel and motion compensation which enhance other things though they are hugely complex in their own right. Generally the higher up the list (MP1 -> MP2 -> MP4) you go the more aggressively these techniques are used and so more demanding they become.
Finally getting to colours, brightness, contrast and nonsense- in many ways those example images are a variation on the "
make it louder and people say it sounds better" problem/concept (nice video linked but do a search for loudness wars if you are curious there). This is a bit more tricky in video as we have that language of cinema nonsense to contend with and certain types of video will want different filters, different levels of contrast and different levels of saturation. I certainly can not get behind a statement to the effect of H264 is inherently damaging to colours at such a noticeable level as those images.
This is not to say things are not damaged- it is one of those "now you know you will see it everywhere" things (always a danger when you learn about video encoding) but if you look in the darker areas of the image you will probably see bit more noise than you might expect (most people see it as grey, purple, dark blue or something like that. Some groups did try to squeeze that bit more out of things but tweaking the contrast to make more dark areas though this is frowned upon.
This is probably where we get to 10 bit video as well.... my person opinion is many that favour it are the video world's equivalent of audiofools (obvious exception if you are capturing, editing and otherwise being a video engineer) though not quite so likely to see me issue a headbutt. RGB- the three primary colours of light and nowhere to be seen in most end user video, these use YUV (see also YV12) which instead breaks it down into base colour (chromiance - hence the proper name for green/blue screen being chroma keying) and brightness (luminance). Compression also plays with these and there is the issue of subsampling (lesser forms of YUV do actually lose information) which does actually trouble things-
http://users.wfu.edu/matthews/misc/jpg_vs_gif/JpgCompTest/JpgChromaSub.html and
http://broadcastengineering.com/hdtv/avch264-encoding covers some of it though I am probably going way off topic right now.
Of course most people have not got a screen calibrated even remotely close to properly and may even prefer an uncalibrated screen (many is the time I have sorted a screen for someone and they tell me they prefer all the people looking like they have sunburn) so much of this is at best an academic issue (many DVD makers and computer game developers will design things to look good on typically uncalibrated screens however).