So I'm also working up a video entry for the Digital Media Core series. It's not as fleshed out as the music article, so I can't even post an early version of it here yet. The problem is, there's no obvious choice. I'm thinking of calling it a no decision. Here are the three formats I think are worthy, along with some pro/con notes:
H.264. I honestly do believe that this is the format of the future. It's not the format of the present because you can't use it with Windows Media Player, Media Center, or Media Center Extenders. But many of the previous issues with H.264 have been solved (slow encoding times, etc.) and, interestingly, it works fine with the Zune and Xbox 360. So anything is possible.
WMV. Microsoft's format is widely compatible, but not with the iPod, so if this is an issue, it's a non-starter. It's also not great for DVD ripping. (On that note, does anyone know of a WMV DVD ripper that actually works? i.e. creates a WMV file in the native aspect ratio of the original movie? Is preferably free?)
DivX/XviD. These formats are also widely compatible, but not with iPod, and offer very good quality. Device compatibility is so-so.