1) High quality format codec for digital video files (.AVI). XviD uses lossy video compression algorithm to produce small file sizes while maintaining high quality encodes.
2) XviD, backwards for 'DivX', was created by those few who were part of the DivX team during when DivX use to be open source. After DivX went public and started charging for its software, the few "anti-DivX" members continued with their own open source MPEG4 format codec under the name XviD.
"XviD pwnz DivX in every way"