You get a whole lot of colors. Actually, this color format is standard for netcams. The other color formats are older formats to ensure backwards compatibility. This compression technology ensures that there is no loss of data during compression. Generally MPEG, JPEG and other video compression technologies use lossy compression, which allows for some loss of data.
Lossless compression is used for data and program compression.
It is a higher end sensor choice than CMOS, Complementary Metal-Oxide Silicon. CCD sensors improve resolution, lower noise, and have better low light characteristics. CMOS sensors are generally less expensive. The Intel PC Camera is also a CCD sensor camera, whereas the Intel Me2Cam is a CMOS sensor camera. 640x480 is a standard resolution for high quality netcams and the 1280x960 is a resolution that you can obtain with other cameras through many software enhancement programs.