Where MPEG-2 packaged the MPEG idea for optical discs, digital broadcasting and HD, MPEG-4 is for a whole new generation of devices - all the way from mobile phones to digital cinema projection. It still uses the same GOP-based structure, with I-frames, P-frames and B-frames. The big difference is that MPEG-4 has borrowed the concept of tracks from QuickTime, instead of the traditional AVI-style setup of interleaved streams of video and audio. These tracks can include all kinds of things, not just visual and sound data. Text, sprites, textures, synthetic music and images can all be incorporated as well. Like QuickTime, it's a fully fledged multimedia format, where MPEG-2 just does video and sound.
Similarly, where MPEG-2 spans from VideoCD resolutions to HD, MPEG-4 is scalable all the way from tiny resolutions aimed at videophones all the way up to 4,096 x 4,096 for 4K cinema projectors. As a result, MPEG-4 has been adopted by quite a few vendors, which have created versions of the codec based on the published standards, of which more in the next section. MPEG-4's audio compression system, Advanced Audio Coding (AAC), was adopted by Apple in its iTunes service, making it a potential heir to MP3.
The most famous MPEG-4 codec by far is DivX. Although it is still the favourite for BitTorrent movie downloads, DivX is now a fully professional format. In its first incarnation, it was called the DivX ;-) Codec, but now it's just DivX for Windows. Up to version 3.11, DivX used MPEG-4 video compression hacked out of Microsoft's MPEG-4 V3, combined with a hacked version of the MP3 audio format for the sound track. From DivX version 4 onwards, however, the codec was redeveloped from scratch from the base MPEG-4 specification to cement its legitimate status. DivX 4 and above are still backwards compatible with DivX ;-).