Divx , Xvid Support in Windows 7 along wih H.264 video and AAC audio

It's an interesting change by Microsoft, which, in the past, has doggedly clung to the hope that Windows Media Video will end up as the prevailing video format for the internet. It appears to have finally conceded that the vast majority of people are watching downloaded stuff in DivX or Xvid -- possibly a realisation driven by the enormous amount of telemetry data it has collected from users of Vista that it never had access to through XP. It has stopped short of bundling Adobe Flash support into Windows, though, as it develops its own Silverlight technology.

Windows 7 will also support H.264 video and AAC audio. The support for AAC will be welcome news for people with music and video that has been encoded in Apple iTunes, as Windows 7 will be able to play all iTunes media through Windows Media Player.Unfortunately, this won't apply to media that has been purchased from Apple's iTunes store, because Windows 7 can't decode the Apple FairPlay DRM, which Apple refuses to license to anyone else. 

The ability to play back these additional formats has implications for new Windows 7 services like libraries and networked media player support, as Windows 7 users can index and search across their iTunes media without needing to use iTunes as the default player, and can send a wider variety of media content to a centralized location.[Via Apcmag]