XviD is a very popular codec these days, and is used often. Modern builds - like Nic's XviD Codec - can also play back that various DivX encoded files, so it's a good one to install first.
Features of Nic's XviD Codec :

- I, P Frame encoding
- PMVFast and EPZS with diamond and square pattern motion estimation
- inter4v mode
- fullpixell and halfpixel
- precision
- both MPEG4 and H263 quantizations
- custom quant matrices
- Adaptive quantization / Luminance masking.

Changes in Nic's XviD Codec 2009.08.23 :

- Built from CVS 20090823
- Has a small mod to ensure no N-VOPs are created when Packed Bitstream is off and Framedrop is set to 0