The target application of the video dictates the type of file:
Since most computers are not (yet) capable of displaying 30 frame per second full screen broadcast quality video, most files used in this type of application are 1/4 screen or smaller; and only offer 15 frames per second. This cuts down on the amount of data needing to be transfered from the hard disk (or CD) to the screen. To further reduce the file-size, various types of video compression are used. Some of the most popular formats are mpeg, microsoft video, quicktime, ...
Note that most video compression schemes are lossy. This means that the images are altered during compression to optimize colors and minimize the data size. A popular example of lossy compression is used in the JPG image format, and is easily demonstrated: Load a true-color TIF image into your favorite image editor, and save it as a JPG type file. Be sure to choose a relatively high compression ratio. Now open that JPG image and zoom in to an area that offers high contrast color changes. You should see a distinct pattern of distortion letf by the compression algorithm.
Many video formats are also based on a 256-color palette, instead of broadcast quality true color.
This application can be split up into two distinct types:
Industrial video applications range from the corporate presentation to product demo tapes and tutorials. In any case 30 frame (60 field) per second video is required. Although the original source file on the computer usually is rendered/produced in true color, this is not a necessity. Most video recorders and televisions are not capable of reproducing millions of colors accurately. When using a video capture/replay card, the desired compression ratio for this type of application is about 6:1. This ratio approximates SVHS quality.
Video presentations are great for tradeshows,information kiosks, in house education, instruction, ...
Broadcast quality video is also 30 frame (60 field) per second, and is used (as the name would suggest) for broadcast on cable networks, ... The source files are produced in true color (usually 32-bit or higher). The best quality output is obtained by using uncompressed (raw) video. Raw video is produced using no compression, or loss-less compression. Loss-less compression offers less savings in file size, but does not alter the data; and therefor preserves the quality of the footage. The whole purpose of using digital technology is the absence of fading or generational decay. No matter how many times the video is "cut, spliced or copied", the quality remains unaffected.