Cory Doctorow on BoingBoing has an eloquent survey of the battle lines over codecs for Web video ... a battle which is starting to heat up. Chris Double is over in San Jose right now preparing for the W3C Video on the Web workshop where this will no doubt be a critical issue.
We have here a culture clash. On the Web we have more or less established an expectation that standards will be implementable royalty-free. Attempts to introduce royalty-bearing standards are shot down or worked around. Audio and video standards, on the other hand, have a tradition of patent encumbrance and licensing pools --- not to mention DRM attempts. Now these two worlds are colliding.
My personal opinion is that DRM is an expensive and futile exercise. DRM schemes promote monopolies, hamstring innovation, and exclude free software. Moreover the experiment has been tried and it has failed, as the music industry seems to be acknowledging. Mere patent encumbrance isn't as bad as DRM, but it's still a problem for free software and truly open standards.
The good news is that browsers can support more than one codec. The W3C and others who favour an open Web should promote unencumbered codecs as a baseline, which today probably means Ogg Theora and Vorbis. Then everyone will have at least the option of free (both senses) production and consumption of media. Whichever vendors are willing to pay patent taxes can also offer encumbered codecs, and I suppose big media companies will be able to continue their DRM attempts that way.