You think MPEG2 is pretty hot stuff? Technology just keeps getting better and better. It seems that the recently-introduced Windows Media 9 codec represented a high-water mark for low-bitrate compression quality, but now there's a new kid in town: H.264. It was known as H.26L until recently, and apparently it can be used to create DVD-quality video streams at about 1.25Mb/sec.
Oh, the only problem is that it is extremely CPU hungry: a Pentium IV running at 2GHz can encode 1 frame in 10 seconds. The demos given at the recent IBC conference used PCs with h/w accelerator cards.
Here's a link to the article--
http://www.eet.com/issue/mn/OEG20020920S0049