Best codec to use with HD?

[alegator]

What is the highest level of compression that one can achieve in encoding HD video without compromising quality significantly? I've only tried DivX and WMV9, but both reduce filesize by a factor of 2.6 approx.. Also in considering the best codec is important the one that makes encoding faster. So which codec is the best to use for both of these considerations?

[edDV]

"without compromising quality significantly?"

About 2.0-2.6

"important the one that makes encoding faster"

Which do you want? Quality or faster?

[edDV]

Both will be had in the "future" hardware MPeg4 AVC h.264 or VC-1 chips. When these get cheap, the video encoding world will change.

[alegator]

edDV, ideally I want both speed and quality. How can I encode to H.264 or VC-1 codec using Adobe Premiere? I don't see them in the options within the Encoder export settings. Do I have to install the codecs before?
One more note, I tried encoding to H.264 using Quicktime Pro, but when opening the raw HD mpeg created during Adobe Premiere's capture session Quicktime shows an error message:"Error -2048:the file is not a movie file".

[edDV]

We need to discuss process.

Adobe Premiere and Vegas are intended primarily for original production of SD and HD programs. Using Premiere Pro as an example, it performs best when working in uncompressed, DV, HDV or Cineform Digital Intermediate project formats. See this list.
http://www.adobe.com/products/premiere/supportedformats.html
and this detailed PDF listing of formats
http://www.adobe.com/products/premiere/pdfs/premiere_pro_formatguide.pdf

The MPeg2 options that are specifically supported (e.g. HDV, IMX) are special low compression cases designed with editing in mind.

Distribution formats like MPeg2_TS and all MPeg4 (divx, xvid, h.264, VC-1) are intended as final output, not as editing project formats. If any of these formats are to be imported into a project timeline, they must be decompressed during the "render workspace" process.

Pros avoid MPeg2 and MPeg4 as source formats because of the severe losses that occur with each decompression-recompression generation. If one is going to use these formats as sources, then one must accept the generation losses and long decode - encode processing times.

Mainconcept offers a MPeg2 direct editing plug-in for Premiere Pro and Premiere Elements that allows direct editing of MPeg2 (between I frames) without generation loss in the frames that are not processed by filters or effects.
http://www.mainconcept.com/site/index.php?id=7862
http://www.mainconcept.com/site/index.php?id=6875
The cost reduced $59 plug-in for Premiere Elements finally makes this technology affordable by the consumer. There is no MPeg4 version of this technology.

Premiere Pro 2 will output to DV, HDV, DVD ready MPeg2, Divx, Flash and others. Currently H.264 and VC-1 encoders are third party add-on products. Examples:
http://x264.nl/
http://www.mainconcept.com/site/index.php?id=799
http://www.apple.com/quicktime/pro/win.html
http://www.microsoft.com/windows/windowsmedia/forpros/encoder/default.mspx
http://www.4rfv.co.uk/industrynews.asp?ID=45083

In order to import H.264 or VC-1 back into Premiere, they would first need to be decompressed.

[edDV]

PS: I just noticed that the Mainconcept MPeg Plug-in for Premiere Elements does support MPeg4 H.264 import. Interesting.
http://www.mainconcept.com/site/index.php?id=6886