History
DivX ;-) 3.11 Alpha and earlier versions generally refer to a hacked version of the Microsoft MPEG-4 Version 2 video codec, extracted around 1998 by French hacker Jerome Rota (also known as Gej). The Microsoft codec, which originally required that the compressed output be put in an ASF file, was altered to allow other containers such as AVI. From 1998 through 2002, independent enthusiasts within the DVD-ripping community created software tools which dramatically enhanced the quality of video files that the DivX ;-) 3.11 Alpha codec could produce. One notable tool is Nandub, a modification of the open-source VirtualDub, which features two-pass encoding (termed "Smart Bitrate Control" or SBC) as well as access to internal codec features.
In early 2000, Rota created a company (originally called DivXNetworks, Inc., renamed to DivX, Inc. in 2005) to improve DivX and steward its development. The company released a clean room version of the codec as DivX 4.0 in July 2001. It is worth noting, however, that DivX 4.0 did not come from scratch. It was actually the result of the work of many open-source developers put into it back when it was known as the "OpenDivX" project. However when the page was pulled and the source was closed to become the commercial DivX 4.0, many of the unpaid and unacknowledged developers saved the last CVS snapshot of the OpenDivX code and from there worked to create XviD, rivaling DivXNetworks' commercial efforts. Regardless, DivX, Inc. has been granted patents on parts of the DivX codec, which is fully MPEG-4-Advanced Simple Profile compliant. The next major version, DivX 5.0, was released in March 2002.

The latest generation, DivX 6, was released on 15 June 2005 and expands the scope of DivX from being just a codec to including a full media container format. DivX 6 introduces a new file format called "DivX Media Format" (with a .divx extension) that includes support for the following DVD-like features:
Interactive video menus
Multiple subtitles
Multiple audio tracks
Chapter points
Other metadata
Multiple format
While in previous generations, video encoded with DivX was analogous to video formats such as MPEG-2, in its 6.0 generation, the new DivX Media Format is analogous to media container formats such as Apple's QuickTime. Much in the way that media formats such as DVD specify MPEG-2 video as a part of their specification, the DivX Media Format specifies MPEG-4-compatible video as a part of its specification. However, despite the use of the ".divx" extension, this format is simply an AVI file renamed. The methods of including multiple audio and even subtitle tracks involve storing the data in RIFF headers and other such AVI hacks that have been around for quite a while, such that even VirtualDubMod supports them. Of course, the traditional method of creating standard AVI files is still supported.


DivX and Spyware
At one point, DivX Networks offered for download an "ad supported" version of their DivX Professional product free of charge to users who were willing to view adverts. The adverts in question were delivered by the notorious Gator adware software. While this attracted much criticism at the time, it should be noted that users had to manually select the "ad supported" download rather than the for-pay professional version or the free version. Additionally, users were informed during installation of the ad supported version that the Gator software would be installed on their PC and were presented with a license agreement which they had to agree to in order to continue the installation. Unfortunately, the Gator software was notoriously difficult to remove after installation which caused considerable consternation amongst DivX users, persuading many to turn to its Open Source rival, XviD, which is freely available without installing adware and has been demonstrated in independent comparisons to produce better quality output (see section on Quality below).
Due to the generally hostile opinion towards spyware on the internet, DivX Networks announced on the DivX.com web site that, from July 15, 2004, no further DivX software would incorporate any adware [1]. Free versions of DivX Pro before 5.2 typically contained spyware. From 5.2 onwards, including version 6, no spyware was included. When accessed in March 2006, the Professional version of DivX was only available in the form of a paid release or a 6-month free trial with no adware included.


Current Version
The current version of DivX (version 6.2.2) is available from DivX.com for Windows 2000/XP. The latest version of DivX for Mac OS X is version 6.0.2, released March 24, 2006. In addition, an unofficial DivX for Linux codec update has also been released at version 6.1.1. The DivX codec and Player are available for free at the DivX website. Paying customers can access additional features of the DivX codec in the registered version, known as DivX Pro, and can also use DivX Converter, a one-click encoding application as a revamp of Dr. DivX and associated encoding tools (such as the Electrokompressiongraph™, or EKG, which helped increase the viewability of highly compressed high-motion scenes).
Recently DivX have also released the DivX Web Player 1.0 (formerly known as the DivX Browser Plug-In Beta) via the DivX Labs website, demonstrating 720p HD playback live inside major browsers for Windows and Mac OS. Development of Dr DivX 2, an Open Source DivX transcoding application, has also begun.
A preview of version 6.2 of the DivX codec has been released by DivX Labs. Like Windows Media Video codec, this is also a multithreaded codec. As such, it provides noticeable performance increase in multiprocessor systems.
An open source version of the codec—called OpenDivX®—was released by DivX in early 2001, and this version served as the basis for the open source XviD codec, the source code of which is maintained by an independent group.
The main competitors in the for-license video compression software market are Microsoft's Windows Media Video series, Apple Computer's QuickTime, and the RealNetworks RealVideo series.


Quality
While DivX has long been renowned for its excellent video quality, its open-source equivalent XviD, also based on MPEG-4 Part 2, now offers comparable quality. In a series of subjective quality tests at Doom9.org, the DivX codec was beaten by XviD in the 2003, 2004, and 2005 tests. Objective testing, however, tells a different story with DivX achieving higher ratings than XviD.
Since the standardization of H.264/MPEG-4 AVC, also known as MPEG-4 Part 10, a new generation of codecs have been created, such as x264. Despite being at a relatively early stage of development, these codecs already out-perform DivX in Doom9's 2005 quality test thanks to the more advanced features of MPEG-4 Part 10. Part 10's advanced features come at a cost: they are many times more CPU-intensive than the relatively lightweight algorithms used in the DivX codec. It remains to be seen whether DivX will, like the XviD team have with their XviD AVC codec, release a new codec based on the newer specifications.