MPEG-2 is a standard for 'the generic coding of moving pictures and associated audio information'. It describes a combination of lossy video compression and lossy audio data compression methods which permit storage and transmission of movies using currently available storage media and transmission bandwidth.

MPEG-2 is widely used as the format of digital television signals that are broadcast by terrestrial (over-the-air), cable, and direct broadcast satellite TV systems. It also specifies the format of movies and other programs that are distributed on DVD and similar discs.

MPEG-2 is also the core of most digital television and DVD formats, and this is why converting DVD to single MPEG2 file would hold closest original quality.

MPEG-2 includes a System with two sections:

MPEG transport stream, designed to carry digital video and audio over possibly lossy media, where the beginning and the end of the stream may not be identified, such as broadcasting or magnetic tape.

MPEG program stream, a container format designed for file-based media such as hard disk drives, optical discs and flash memory.

Compare MPEG2 and MPEG1:

We should understand that MPEG-2 is not a successor for MPEG-1, but an addition instead - both of these formats have their own purposes in life. Below are some tips that make MPEG2 edged out MPEG1 format:

1. MPEG1 is an audio compression system limited to two channels (stereo.)

2. MPEG1 has no standardized support for interlaced video with poor compression when used for interlaced video

3. MPEG1 has only one standardized "profile" which was unsuited for higher resolution video.

4. MPEG-1 could support 4k video but there was no easy way to encode video for higher resolutions, and identify hardware capable of supporting it, as the limitations of such hardware were not defined.

5. MPEG1 support for only one color space, 4:2:0.