H.264 is a new standard for video compression which has more advanced
compression methods than the basic MPEG-4 compression. One of the
advantages of H.264 is the high compression rate. It is about 1.5 to 2
times more efficient than MPEG-4 encoding. This high compression rate
makes it possible to record more information on the same hard disk.
The image quality is also better and playback is more fluent than with
basic MPEG-4 compression. The most interesting feature however is
the lower bit-rate required for network transmission.
So the 3 main advantages of H.264 over MPEG-4 compression are:
‐ Small file size for longer recording time and better network transmission.
‐ Fluent and better video quality for real time playback
‐ More efficient mobile surveillance application
H264 is now enshrined in MPEG4 as part 10 also known as AVC
Refer to: http://www.velleman.eu/downloads/3/h264_vs_mpeg4_en.pdf
Hope this helps.