MPEG1 and MPEG2 are the choices, MPEG1 is generally used for VCDs, and is a lower-quality codec. MPEG2 is the standard for DVD-video and most satellite and cable broadcasts.
2-pass encoding means just that. the video is analyzed on the 1st pass for motion, then again on the second pass as it's encoded. Results in much higher quality in most cases, depending on the video.