CODEC = COmpressor/DECompressor
All video formats you will come across have been compressed in size using 'a particular type' of compressor. In order to play those files, you need to have a program that will decommpress that 'particular type' of file. There's many, eg: indeo, mpeg 1-20 odd, avi, wmv, rc, cinepack, etc.
Codecs are mini programs that load up for a particular type of file. So for example if you're using Windows Media Player & you wish to play a mpeg2 type file, WMP will need to call upon an mpeg2 codec. So there's many codecs for each type of compressed format.
There's some programs like VLC which have in-built codecs. But most players require that you obtain the codecs separately. DivX player I don't know a great amount about. The DivX format is a derivative of MPeg4. Dare I say it, I don't know a lot about the windows video players b/c I use a mac computer.
I can tell you that VLC will play almost anything except the occasional WMV file. But VLC is not the prettiest of programs, & doesn't have an especially elaborate set of controls, etc.
It's really personal choice. Some people swear by their player. They obtain extra codecs & can play almost everything with them.
If you choose to dwnld extra codecs, I would recommend these:
http://www.divx-digest.com/software/nimo_pack.html & possibly
http://www.free-codecs.com/
What many people do is have a backup player for those files that they hve difficulty playing even though they have most codecs installed. I'd suggest VLC:
http://www.videolan.org/vlc/
DivX movies are becoming very popular & you might consider having the DivX player as well so it plays as smoothly as possible. If you do, you should make divx player the default player for all divx format files. (ie: select file & go to File>Properties & press button for Open with... )