MPEG is short for Moving Picture Experts Group, and pronounced "m-peg", a working group of ISO. The term also refers to the family of digital video compression standards and file formats developed by the group. MPEG generally produces better-quality video than competing formats, such as Video for Windows, Indeo and QuickTime. MPEG files can be decoded by special hardware or by software.
MPEG achieves high compression rate by storing only the changes from one frame to another, instead of each entire frame. The video information is then encoded using a technique called DCT. MPEG uses a type of lossy compression, since some data is removed. But the diminishment of data is generally imperceptible to the human eye.