Without being able to give them the eyeball test, I'd be inclined to Video 2. Xvid and DivX are basically the same codec, so that's apples vs. apples. Video 2 appears to be a widescreen SD format video and wouldn't require any upresolution to be displayed on a standard definition television. Any advantage that the extra bitrate of Video 1 offers would probably be eaten up trying to convert it to a normal television source. Bitrate is important, but it's not everything. Video 2 has a slightly better audio track, too.