H.264 and VC-1 are two video compression standards. While H.264 is an open standard, VC-1 was initially developed by Microsoft. Transcoding involves converting a video from one compression format to another. Transcoding H.264 to VC-1 allows content in both formats to be viewed by any VC-1 decoder. Compared to H.264, VC-1 requires less computational power while still providing good compression and quality, especially at bit rates around 6-8 Mbps. Both standards use techniques like block-based transforms, motion compensation, and entropy coding.