Theora is an open video codec being developed by the Xiph.org Foundation as part of their Ogg project (It is a project that aims to integrate On2's VP3 video codec, Ogg Vorbis audio codec and Ogg multimedia container formats into a multimedia solution that can compete with MPEG-4 format). Theora is derived directly from On2's VP3 codec; currently the two are nearly identical, varying only in framing headers, but Theora will diverge and improve from the main VP3 development lineage as time progresses.
