x.264 (and H.264) are indeed superb codecs and the container allows you more flexibility than any other codec I have seen so far. The output files are about half the size of the XviD (avi) files for equivalent quality. Coupled with some avisynth scripting you can get amazing quality. You can also encode 5.1 channel sound and other utilities such as menus etc. with these codecs.

But be warned that the x.264 files will not be playable on any DVD player currently in the market. (Don't get impressed by DVD players that claim to be able to play mp4. They are mainly for lossless sound codecs) You can only watch these movies on your computer. I also dont know of any easy to use x.264 to standard DVD converter that uses high quality encoders like CCE to give VOB files.

No doubt this will change. Apple Computer is actively promoting x.264 and I'm sure some DVD manufacturers will jump on to the bandwagon, but until then this codec is for your desktop computer and not the large screen.

(Unless of course you can afford a large dual use plasma display and a portable computer which can use it as an external display --- )