H.264 is a video compression standard that provides various encoding options that trade off quality, bitrate, delay, and computational requirements. The document discusses key H.264 encoding concepts like slices, macroblocks, frames, prediction modes, and entropy coding. It explains that the encoder evaluates coding modes for each macroblock based on rate-distortion optimization to minimize the cost function of distortion plus a weighting of bitrate. Practical encoding strategies aim to reduce computational overload by limiting coding modes or approximating the cost calculations.