WMV stands for Windows Media Video -- developed and controlled by Microsoft. WMV is a generic name of Microsoft's video encoding solutions and doesn't necessarily define the technology what it uses -- since version 7 (WMV7) Microsoft has used its own flavour of MPEG-4 video encoding technology. DivX video format is originally based on hacked WMV codec.
Windows Media Format 11 adds support for HD video up to 1080P. WMF 11 runs only on Windows XP and Vista.
Additional information is available on Microsoft Windows Media page.
Defined by Microsoft, AVI stands for Audio Video Interleave. It is a special case of the RIFF (Resource Interchange File Format). AVI is the most common format for audio/video data on the PC.
AVI is Microsoft's response to Apple's QuickTime technology. Early AVI files were limited on choice of video and audio codecs, quality, and resolution. However, with the introduction of DirectShow, AVI became a very flexible and powerful architecture. Some newer codecs including DivX and XviD enable AVI files to have similar or even better quality than DVD.
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