DivX and Xvid are both Mpeg4 formats Gill.
DivX is a copyrighted format and Xvid is an open source development. They both compress by a similar amount and are both excellent quality as long as whoever converts the files doesnt try to make them too small. A 2 hour film converted to Mpeg4 at just under 700mbs so that it would fit on a single CD could be a little poor on quality, similar to a VHS tape on long play. If they are converted to between 1200 and 1400mbs so that they fit on 2 CDs or put 3 films on a DVD then there is no real detectable difference in the quality to a standard DVD.
I once did an experiment with a bought DVD of around 6.5 gig,, I used DVD shrink to make a copy, missing all the extra audio and chapters and crappy directors stuff out and burned it as a standard 4.7gig DVD, I then converted that file to a DivX at around 1200mbs and burned to a DVD, I then converted the DivX back to fit on a standard 4.7gig DVD.
I had a friend round and we played the original and the copies back on my 32" CRT TV from my Mpeg4 DVD player and we couldnt tell which was which as the quality was excellent on all of them.
Maybe if you had a 42 inch or larger plasma or LCD TV then you may have noticed some difference but there again if you were watching DVD in SD on any plasma or LCD youd have thought they were also all the same quality as the picture obviously wouldnt be as good as when watched on a CRT TV anyway.
I have had a Yamada Divx player, they were amongst the first of the cheap ones to come out and I recommended them to a few friends who have been happy with theirs.
I dont use my current one much as I tend to play most DVDs off my PC via a component connection as some formats still wont play on an Mpeg4 player such as RM, Quicktime and Matroska files, whereas of course the PC plays them all.
I have a Philips DVP 5980 which has a USB port on the front but I have had problems getting it to see my USB flashdrives, but it upscales to 1080P.