VCD (Video CD) is the prototypical late-20th-century unauthorized data
carrier. The format is simple, beautiful even: an MPEG-1 data stream burned onto
a CD in an ISO 9660 file system format (also known as White Book).
VCDs are cheap to make, easy to smuggle, and reasonably well-supported by a
variety of home media devices. They are also one of the most popular video
formats in the world thanks to the format's success in China, where something like
20 million households have a VCD player. In the Occident, VCDs are becoming the favored medium
for permanent storage of decaying home movies.
To its credit, the VCD format has no encryption (unlike DVD), no copy protection (unlike DVD), and you can make one with just about any old CD-ROM writer--all of which adds up to a thriving pirate market at your local Chinatown. To its discredit, VCD has a blurry picture resolution of 352x240 (NTSC, 352x288 for PAL) and A/V data is stored in an MPEG-1 stream that that looks--well--not so great, really, but is perceptually little worse than VHS. (Weird geometric compression artifacts are another bonus, particularly during scenes of quick movement.) And where DVDs merely look like CDs, VCDs are CDs--the media is the same, the only difference is the data format.
So the quality is not so great, but definitely acceptable. What makes VCDs cooler than that is their egalitarian playability:
BBS-style Video CD forum
Russil Wvong's VCD FAQ
Trixter's Desktop MPEG-1 Authoring FAQ
Pirating DVDs to VCD: it can be done
MpegTV: VCD/mpeg player for Linux/Unix
Adaptec Easy CD Creator Deluxe
NTI CD-Maker (free trial version)
Dr. V64 manufacturer, US distributor
Playstation and Sega Saturn VCD adapters