Depends on the video's format and compression.
Figure that a standard DVD-R holds about 4.7 GB data (+/- formatting). If I go the "data disc" route, then I can stash 2 to 4 movies per disc. More if I use DivX [*]. If I go the "DVD" route (format 'em to play the discs in a DVD Player hooked to my TV) then a movie might take two discs, because it has to be uncompressed quite a bit.
You got this pretty well, but let me clarify a bit. A standard DVDr using regular DVD player compatible bitrates and MPEG-2 will hold two hours on a single layer-single sided disc. Dual layer will hold just under four hours. A decent quality (better than VHS, not as good as DVD, maybe around the same as a VCD) DiVX file will use around 200MB per half hour. Seeing as a DVD holds approx 4.4GB (4.7 if you don't include file system overhead) that means you get around 11-hours of video on a single disc. The exact amount will depend on the DiVX file size.
...A recent copy of one of the Matrix movies I saw was in DivX format. The quality was decent - better than VHS. The file was only 1.1 GB.
[*] DivX. The format I love to hate. DivX is an enhanced MPEG-4 video with MP3 audio. It's a fav format of the p2p crowd because of its small file size. And, of course, to make 'em even smaller, they squeeze more so the picture quality suffers badly. Many are like VHS recordings made on your worst over-used tape. The worst problem: Each generation of DivX codecs has a slower playback frame rate (code bloat) and looses more and more capability to play older DivX versions (broken unsupported code). There are also difficulties playing DivX files on Macs if they were created on PCs. :\
Technically, DiVX was released well before the specs for MPEG4 was ever finalized. It's more of an offshoot of MPEG4 than an enhanced version. I can't speak for the speed issue of the DiVX decoders, but I have no problem with good quality files on my G4/400. 3iVX does seem quite a bit smoother than the official DiVX plugin though. Although, I just use VLC for everything.
The only issue with DiVX on a Mac was a bug in Quicktime that would cause MP3 audio embedded in a DiVX - .avi file to not play. The latest version of the official DiVX plugin has a workaround built-in. Unfortunately, the 3iVX plugin still needs a separate program to fix the issue before you can play it in Quicktime. VLC does not have this problem, as well as being able to play the newer .ogg and .mkv DiVX file formats.
Will the resolution be as good as the original movie?
Define "original movie". Most of my stuff is EP speed, taped of da TV. I expect that visually the digital copy will be at least as good as the tape. But then some of my tapes are old - so *shrug*
You can't bet better than the source, although you might be able to clean it up a bit. DVD is way above VCD, VHS and the like. MPEG4/DiVX are equal to DVD when you encode them at higher bitrates. Much like MP3, go with a lower bitrate, you get a low end file.
MPEG4 is to DVD/MPEG2 as AAC is to MP3. It's newer and fits the same quality into a smaller file size at lower bitrates. Side by side, generally, a MPEG4 file at the same bitrate as a MPEG2 file will stomp the living daylights out of the MPEG2 file. The same way a 128kbps MP3 can't compare to a 128kbps AAC file.
-Rob
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