With the imminent release of Firefox 3.5 and the big step forward for unencumbered video and audio that this represents, there's been a lot of discussion about the merits of the free Ogg codecs vs the flagship encumbered codecs, especially H.264. Proponents of the encumbered codecs tend to focus on the technical advantages of patented techniques used in H.264 but not in Theora. But the real question that matters is this: at comparable bit rates, in real-world situations, do normal people perceive a significant quality advantage for H.264 over Theora? Because if they don't, theoretical technical advantages are worthless.
(It's not helpful to ask a video compression expert if they can see quality differences. Of course they can, they're trained to. That doesn't tell you what matters for the other 99.9999% of the population.)
One issue that has made a comparison difficult is that encoders are so tunable. People always say things like "oh, your H.264 would look much better if you set the J-frame quantization flux capacitor rank to 8". So Greg Maxwell had a stroke of genius and did a comparison using Youtube to do the encoding. Now, people who think the H.264 encoding is sub-par are placed in the difficult position of arguing that Youtube's engineers don't know how to encode H.264 properly.
In fact Youtube deliberately doesn't squeeze the most out of H.264 encoding. That's because in real life there are tradeoffs to consider beyond just quality and bit-rate, such as encoding cost and bit-rate smoothing. But that's fine, because these are the real-life situations we care about.
Maik Merten recently repeated Greg's experiment with different video in larger formats. In these tests, it seems pretty clear that there is no real advantage for H.264, or even that Theora is doing better.
We really need someone to do a scientific blind test with a wide pool of subjects and video clips (hello academic researchers!). But H.264 proponents have to demonstrate real-world advantages that justify surrendering software freedoms and submitting to MPEG-LA client and server license fees (not to mention the hassle of actually negotiating licenses and ensuring ongoing compliance).