bigmammoth writes "Xiph hackers have been hard at work improving the Theora codec over the past year, with the latest versions gaining on and passing h.264 in objective PSNR quality measurements. From the update: 'Amusingly, it also shows test versions of Thusnelda pulling ahead of h.264 in terms of objective quality as bitrate increases. It's important to note that PSNR is an objective measure that does not exactly represent perceived quality, and PSNR measurements have always been especially kind to Theora. This is also data from a single clip. That said, it's clear that the gap in the fundamental infrastructure has closed substantially before the task of detailed subjective tuning has begun in earnest.' Momentum is building with a major Open Video Conference in June, the impending launch of Firefox 3.5 and excitement about wider adoption in a top-4 web site. It's looking like free video codecs may pose a serious threat to the h.264 bait-and-switch plan to start charging millions for internet streaming of h.264 in 2010."