Why didn't the MP1 and MP2 formats become popular? Is there an MP4 format?

The MPEG-4 format offers a higher (lossy) compression rate for both video and audio. What impact this may have on video and audio quality is unknown. For example, the lower bit rate in Dolby audio makes it sound inferior to DTS. MP3 suffers from the same problem: lower bit rates (<256k) produce sharply reduced audio quality. Video compression artifacts are readily visible in DVDs. The compression level is directly related to image quality, although the eye is much more forgiving than the ear.

MPEG-4 is an essential ingredient in the proposed HD-DVD standard, a stopgap format designed to cheaply (for the manufacturers) bridge current and upcoming technologies. It will require higher levels of compression than are currently used with MPEG-2 DVDs. Its proponents claim that MPEG-4 provides comparable quality at twice the compression rate. I'll believe that one when I see it.

If adopted, HD-DVD will almost certainly be rendered quickly obsolete by Blu-ray. The consumers will, yet again, be forced to pay for another industry-sponsored format war. Blu-ray has a substantial advantage in that the disks can physically store much more data. Therefore, the content developer can provide higher or lower levels of compression at their discretion, depending on the content of the recorded material. Lossy compression always means lower quality.

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Correction: I had previously stated that HD-DVDs may have an issue with disk thickness. This is incorrect (too many different formats to remember).

It is the DualDisc - a two-sided disk with a CD layer on one side and a DVD layer on the other - that will be thicker than conventional DVDs and CDs. There may be problems with playing these disks in some players if their transports cannot handle the thicker media. DualDiscs are intended to be 'added value' products, for example, providing the user with music on one side and music videos by the performer on the other. However, if the disk cannot be played, it would provide little added value. Once again, manufacturers are trying to develop another optical disk format to add to the dozen or so already in use, with compatibility a second consideration.

MP3 is a subset of both MPEG-1 and MPEG-2.
It stands for MPEG-1 Layer 3 or MPEG-2 Layer 3.

Each of the layers represents a certain part of the standard.
i.e. MPEG-1 Layer 1 is the video aspect of the MPEG-1 standard, MPEG-1 Layer 3 is the audio aspect of the standard. Likewise for MPEG-2.

MPEG-2 is a more advanced technology, so offers better compression at both the video and audio level.

The MPEG consortium decided to skip the MPEG-3 standard, to avoid confusion with MP3, and skipped to MPEG-4. MPEG-4 is the latest standard and offers superior video and audio compression, compared to the other two and is mainly used for video/audio on things like mobile phones, portable media players and soon to be used for HD-DVDs/Blu Ray (Next generation DVD's)

Since MP3 is short for MPEG-3 - you are really asking what became of MPEG-1, 2, and is there are a 4... well...

MPEG stands for Moving Pictures Experts Group - a working group of people and companies developing standards for coded representation of digital audio and video.

MPEG-1 is used with Video CDs, and forms the basis for the MP3 format. Not so popular any more because of the quality when compared to DVDs.

MPEG-2 is used in DVDs and Digital Television set-top boxes. So this is pretty popular!

MPEG-3 (MP3) is, as we all know and love, the audio compression codec of choice for music.

MPEG-4 is a standard for multimedia on the web, allowing higher levels of interaction with content, within the limits set by the author. It also brings multimedia to new networks, including those employing relatively low bitrate, and mobile ones.

There is also a MPEG-7 and a MPEG-21 - if you are interested - it's all here: http://www.chiariglione.org/mpeg/