Windows ships with several codecs that VirtualDub may use. Launch VirtualDub to see what options are available to you. Select Video | Compression (the associated keyboard shortcut has changed in version 1.6.0 from Ctrl+C to Ctrl+P):
The list is populated with all the codecs available to VirtualDub. When you select one, VirtualDub will also display any known restrictions such as accepted color spaces on the right. In all honesty, the only codecs that you might ever use from that list are Microsoft’s H.261 and H.263 codecs. H.261 was designed for video-conferencing applications at bit rates that are multiples of 64 kilobits per second. H.263 advanced on H.261 resulting in higher coding efficiency. Unfortunately, both of them are locked and you cannot use them to compress video! Do not sigh; they are not exactly state-of-the-art anyway!
The same applies to audio codecs; the one that ships with Windows does not permit high-quality encodings. In particular, the MP3 codec bundle allows...