The document provides an overview of the Dirac video codec and compares its performance to H.264/MPEG-4 AVC. Dirac is an open source video compression format developed by the BBC that uses wavelet transforms and arithmetic coding. It achieves compression performance close to H.264/AVC at lower bitrates, with less complexity, though H.264 provides slightly better compression at higher resolutions. Testing showed Dirac performs better than H.264 at low bitrates for QCIF sequences.