DIVX really is a DVD with extra copy protection. It is all up to the authoring techs what bit rates they actually encode the video and audio at. However, due to the heavier Triple DES encryption used for DIVX, there are some legitimate quality issues to be noted. Also, many early Zenith players reported locking up of the picture in the middle of playback of DIVX discs. However, this is apparently a solvable problem and current and future players should correct this defect.
Quality extends beyond just the image and sound.
DIVX is learning this the hard way, as their recent financial troubles indicate. Yes, this is a very valid point, especially when talking about preserving the director's vision and the original theatrical aspect ratio. Or, a director will often, upon watching the film being transferred to video, prefer to see more information added to the top and bottom of the picture than was seen in the theater. This has happened with both RoboCop and Damage, interestingly enough. For 16x9 and DVD, two choices can be made.