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h264 got better video compression and at the same time lower file size output than xvid. and tthere that other features in h264 that are not present in the old xvid. if you have read about h264, you should at least get the idea why its becoming prominent choice when they encode video because of those features.
regard with the hardwares i play mkv/h264 with. i use my pc and a xbmc' htpc. its nice that xbmc is handling those mkvs with advance ass subtitle quiet well.
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