To use 'Codecs' click the 'Compression' button at 'Record Settings'.
When you use 'Codecs' the output format for video is AVI and for audio is WAV or MP3. Codecs use third-party technologies like DivX, MPEG-3, MPEG-4, Indeo, XDiv, etc.
Compression using Codecs:
Codecs can be used to compress audio and video and the compression process is done on-the-go.
Applying no compression to audio or video stream is ideal if you intend to edit the stream later, however it generates massive large files specially for video streams. 1AVCenter will stop recording a file if it reaches the limit of free space on the hard disk. The default limit is 500MB but you can change this value at the 'Global Options' dialog.
If you intend to compress the audio/video stream using a codec select it from the list of all the codecs installed in your system. A different set of codecs will be listed both for audio and for video.
Output is AVI for video and WAV or MP3 for audio. Learn how to record MP3 files.