Xvid vs X264
Xvid has been around for a considerably long time, since the time it branched off from DivX. And during this time it has grown considerably in quality and it has arguably surpassed DivX in terms of video quality and compression. Xvid is an alternative codec library that follows the MPEG4 standard. It is often due to the relatively small file size of the resulting video file. Another, more recent, codec standard that is rapidly gaining popularity is H.264, largely because of its more advanced features and high quality encoded videos. But in order to encode into the H.264 format, you would need to have an encoder, and that is what X264 is.
X264 is just one of the few software libraries that you can use to encode videos into H.264. X264 boasts to be the best H.264 encoder in existence, even surpassing those that are being commercially sold. X264 is only necessary when you are encoding the video from any format to H.264. You do not need it during playback as the resulting file can be played as long as you have an H.264 codec installed. With Xvid, this is also true, but not always. Xvid is based largely from MPEG4 and the resulting file can be played with almost any of the MPEG4 codecs available if you do not use any of the advanced features of Xvid that breaks compatibility. If you do, then you must have the Xvid codec installed in the devices that you intend to play the videos on.
Choosing between these two video encoders, you should first consider the devices that you wish to play your videos in. If you like to take advantage of the high quality of H.264 encoded videos and all your devices can play these videos, then X264 is an excellent choice. If you have a lot of older devices that do not support or are not capable of playing back H.264 files, or if you intend to share the files to your friends, then Xvid is the safe choice for the time being. It is beyond doubt that it is only a matter of time before H.264 becomes widespread.
Summary:
1.Xvid is a codec library for encoding and decoding video files while X264 is a software library for encoding video files into H.264
2.You would only need X264 during the encoding process while you would need to have Xvid during playback if you utilize its advanced features