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VC-1 was designed for HD and film content from the get-go, while H.264 only really became competitive in that arena relatively late with the addition of High Profile, created after VC-1 beat MPEG-2, and both beat H.264, in the initial DVD Forum HD tests.
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Technically speaking, H264 main profile is superior to VC1 & MPEG-2 for HD. High profile is, of course, a lot better, because 8x8 transform is really a must for HD stuff, but even so, H264 MP outperforms both codecs.
However, when they did those tests, they may not have used a good h264 encoder. And it's easy to make a H264 encoder less efficient than Mpeg2. Look at ATI's software H264 codec...
So I'm interested in knowing what encoders where used for that DVD Forum HD comparison.
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MPEG-4 Part 2 has been a great success
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No. For the industry, Mpeg4p2 is a huge failure. The only success for Mpeg4 part 2 is that it's widely used by pirate. That doesn't make it a success
Finally, mpeg4 part 2 is only ~20% more efficient than Mpeg2. Don't be fooled by the fact that you convert a DVD 9 to a 700MB CD to rate mpeg4's efficiency. DVD9 is an overkill, it has a GOP of 12, and professionnal mpeg2 encoders used for DVD aren't that good.