The configure dialogue boxes for Microsoft's MPEG-4 codecs and DivX 3's codecs are the same (Gee, I wonder why…). There are only three parameters available to adjust. DivX 4 and DivX 5 both offer more options, but most of these additions are of little use, with the only major difference being that the data rate can be set higher. Since there are only three parameters, it isn't difficult to learn how to encode good video using these codecs. In fact, if you are in a hurry and don't want to experiment, in many cases the default settings will yield adequate quality and file size.
The three major parameters are:
For example, say you specify it to keyframe every 20 seconds. There is a Keyframe at the beginning, at 20 secs, at 40 secs, etc. Now say you want to go directly to a point 14 seconds into the video. When you attempt to jump ahead, the video will not start playing until it reaches the Keyframe at 20 seconds. If you had keyframed every second, then the video would start playing exactly at the 14 second mark.
More keyframes also yields better image quality, although the influence is very minor, often not noticeable. More keyframes also result in a larger file size, but again, the difference is minor.
This settings usually only makes a difference at very low data rates. At this point, the codec may not be able to compress all the frames at the best quality, so it has to choose to either drop frames or allocate fewer bites to each frame, resulting in poorer quality. This slider determines which option the codec is likely to choose. If the number is higher (closer to crispness) then image quality will be the main concern and frames may be dropped. If the number is lower (closer to smoothness) then the codec will try to encode all the frames to ensure smooth playback.
As stated above, this setting only comes into play at low data rates (its impossible to say exactly when it matters, since it depends on what the video source is, but 500 kbps is a good place to start to be concerned about dropped frames.) Usually if the bit rate is very high, you can leave it at 100 and you will get both maximum quality and smooth playback. If it is a moderate bit rate, you may want to leave it at 75 to be safe. If the playback of an encoded file is choppy, lower this setting and try again.