No, You Can’t Do That With H.264 is an excellent write up of how H.264 (“MPEG-4″) is fraught with problems that you just would not have if using Free (as in Freedom) formats such as Ogg Vorbis and Theora.
It is amazing that Final Cut “Pro” cannot actually be used to create H.264 content for commercial (i.e. “Pro”) use!
It’s the same for MPEG-2.
Oh, and if you use it to decode video that was encoded by somebody without the proper license… well, then you’re also screwed. How the heck you’re meant to work that one out I have no idea.