What's the difference between decoding, encoding, recoding and transcoding?
Conversion of a video file which is present in a special format into another video format (e.g. DivX in DVD or MPEG-2 in DivX,…).
Conversion of a video file which is present in a special format with special attributes in the same format with different attributes (e.g. 2 h movie with 3000 Kbit/s into 2 h movie with 2000 Kbit/s).
Creating a video file in a special format (e.g. DivX, MPEG-2, MPEG-4, ...) - You'll need a DivX Encoder in order to be able to create DivX files and a MPEG-2 Encoder in order to be able to create MPEG-2 videos. You'll need these encoders for transcoding and recoding video files as well.
Simply opening and watching video files with a video player (e.g. a DivX decoder for opening DivX files or a MPEG-4 Decoder for opening a MP4 video file).