How MPEG Works
The MPEG codecs use lossy data compression using transform codecs. In lossy transform codecs, samples of picture or sound are taken, chopped into small segments, transformed into a frequency space, and quantized. The resulting quantized values are then entropy coded.
The moving picture coding systems such as MPEG-1, MPEG-2, and MPEG-4 add an extra step, where the picture content is predicted from past reconstructed images before coding, and only the differences from the reconstructed pictures, and any extra information needed to perform the prediction, are coded.
MPEG standardizes only the bitstream format and the decoder. The encoder is not standardized in any way but there are reference implementations available for members that produce valid bitstreams. That means that any MPEG-4 decoder can decode any MPEG-4 material (of the same type) regardless of the encoder which produced that material.
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