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More info:
Videos have three levels. First, a container file which can hold several videos, audio streams, pics, links, etc. That's what wmv is - a box that you put videos and pictures in.
Within the package, you have a video stream and an audio stream. Mp4 is a type of video stream which can be put into a wmv box, a mov box, or other types of boxes. It's normally put in a box which also contains mp3 audio.
In order to create a video stream such as a mp4 stream, you need an encoder. To decide it, you need a decoder. Since it's good gor the encoder and decoder and decoder to match, they come as a coder/decoder, or codec for short.
To review -
An wmv file is a container or box with an mp4 or other video inside. The wmv container can also hold jpegs, mp3s, and other things because it's just a box. Flv and mov are two other types of boxes to put video and stuff in.
Mp4 is the actual video, which may be put in a wmv box.
codecs create mp4 and other videos.
A good codec can make a quality video.
Flash, Apple, and Microsoft all encourage you to put mp4 in their respective container formats, though of course Microsoft first tried switching the left to the right and turning things upside down to create compatibilty problems and therefore vendor lock in.
The container formats (wmv, flv, mov) have no effect on the quality of the video you put in them.
Note - a mp4 video that's not in a box, but is just quickly wrapped in a thin sheet of paper, is often called a .mp4 file.
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