Bitrate is the average number of bits that one second of audio/video data will consume. Generally speaking, a higher bitrate results in better quality picture and sound, but this has to be balanced as mpeg players can only read the data at a given rate. Therefore it is important not to exceed this bitrate or the encoded file will not play back. 

Differing bitrates are also used when creating online presentations, as the images have to be downloaded via the net. In this situation, several versions at differing bitrates are often created to give the user the best choice of quality over time spent downloading depending on their type of modem.

There are two types of birate settings that most encoders support. These are:

Constant Bitrate (CBR)
CBR attempts to keep the bitrate of the MPEG as close to a constant value as it possibly can, this enables the quality of the video the be maintained in scenes with little or no action. Unfortunately, on a video with mixed content, for example a quiet scene that suddenly explodes into action, the action scene will often look jerky and poor quality if CBR is used.

Variable Bitrate (VBR)
VBR does just that. They vary the bitrate of the video, using higher bitrates for the scenes with lots of action, so if the example above was encoded in vbr, the initial scene would be at a very low bitrate, then the bitrate would be increased for the action scene thus maintaining the overall quality of the presentation. For mixed content scenes VBR is ideal.

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