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  1. Are these two formats the same? They both have the similar resolutions and mpeg4 video/audio codec. Why they cannot be used interchangeably?
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  2. Well, sometimes. AVI is simple the extension for any type of video. They all are compressed with different codecs, meaning they may look the same on the outside but could be very different on the inside. AVI goes all the way from RGB no compression with huge file sizes to divx with tiny file sizes. These are alot of different avi codecs, huffy, RGB, vcr, indeo, radius,mpeg-4,mjpeg,and so on. All have different characteristics and compression schemes. But all will make an .AVI file. If you dont have the divx codec for instance installed, you cant play divx movies, but you can play other avi that are encoded with codecs you do have.

    ASF, this is microsofts, Advanced Streaming Format. A MPEG-4 varient that is made for internet/network based play. Low file sizes and high quality, its like MS's answer to real media. One thing different about this format is that it can have encryption placed on it. Which means it can be copy protected againest piracy. Most files you will find wont be ASF, most will be avi, rm, or wmv. Windows media Video is a close cousin to ASF in that it uses the MPEG-4 codec as well, but it can also use others.

    The reason sometimes some players cant play other formats is more legal reasons than tech reasons, for instance, real player will play windows media audio files but not WMV. And windows media player wont play any real media at all. That are competitors, and thus wont play each others proprietary formats.

    Video resolution really has nothing major to do with quality. The quality is decided on bitrate for the video, meaning how much data it is allowed to use to display the image, the more data, the better the quality but also higher files sizes. Compare it like this, I give you one can of paint and tell you to paint an entire warehouse with it, you may be able to water the paint down and cover the entire place but the quality is going to be horrid to say the least.
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