divx and xvid are slightly modified version of mp4. (reference - "Methods described in MPEG-4 part 2 (MPEG-4 SP/ASP) are used by codecs such as DivX, Xvid, Nero Digital, 3ivx and by Quicktime 6, and methods described in MPEG-4 part 10 (MPEG-4 AVC/H.264) are used by the x264 codec, by Nero Digital AVC, by Quicktime 7, and by next-gen DVD formats like HD DVD and Blu-ray Disc.").

You should check out VLC player for a fast good playback experience. Quicktime is what most people try to use to play mp4 files, and, yes its a little slow on most computers.

Divx isnt the only file type that DVD players play. Most dvd players that play divx also play mp4. check your manual. Plus the normal and High Profile settings work fine on my ps3.

I was surprised when this happened, but I can appreciate that, ultimately, it's a legacy format. Apparently, the AVI implementation is very convoluted to keep up with new features. Here's a selected quote from their release blog: "It does not support modern container features like chapters, muxed-in subtitles, variable framerate video, or out of order frame display....The code has not been actively maintained since 2005. Keeping it in the library while implementing new features means a very convoluted data pipeline, full of conditionals that make the code more difficult to read and maintain, and make output harder to predict. As such, it is now gone. It is not coming back, and good riddance." (sadly there didnt seem to be a permalink to the whole article - here's the current news page).

As such, I've moved on and figured out which flavor of mpeg-4 works best for me; and I'm happier with the improved picture quality as a result.