In 2011, for h.264, this is completely wrong. Wrong. the most supported container is mp4 because there is an ISO standard for it. And almost any hardware player capable to play h.264, supports this format. If you are talking about your software player not capable to play mp4, you can throw it away, it's outdated for about ~10 years.
Wrong. (container)MP4 does not do any video/audio compression. Codecs do that. MP4 is a freaking container, it only contains an encoded video/audio stream.I can put (almost) any video/audio codec to (almost) any container. The video quality won't change. The size won't noticeably change.
It's a container, not a codec, it should not affect quality or compression.
My opinion on containers:
As for the video codec IMO, there is no discussion or question, currently, h.264+x264 encoder > all.
Why did I wrote this? Because I rage when people say "I 8T MKV BECUZ IT IS SLOWER THAN AVI. MKV SUCKS", "AVI FTW!!11", "XVID > X264!!1", etc., etc...
And I don't want these people to affect the quality (at least video quality) of show I watch and enjoy a lot.
If I am wrong somewhere, tell me.