Knowing about codecs is important, because the codec determines the final quality of the podcast. However, you also have the problem of file formats. The file format dictates how the audio and video information is packaged. Some codecs can fit into a number of different file formats. The problem is that most proprietary systems such as QuickTime, Windows Media, and Real use proprietary file formats to hold the encoded audio and/or video information. File formats are highly guarded trade secrets and the main cause why files are not interoperable between players. However, the file formats also enable the proprietary systems to offer additional functionality. These are the most common file formats you'll encounter:
MP3: MP3 is actually a codec, not a file format. The file format is actually MPEG. (MP3 stands for MPEG II, Layer 3.) MPEG files are almost universally playable and the reason most folks use MP3 to encode and distribute their podcasts.
QuickTime: The QuickTime file format is the earliest multimedia file format and the basis of the MPEG 4 file format. QuickTime files also are almost universally playable, though the codecs inside may not be.
Windows Media: The Microsoft standard, Windows Media obviously plays back on any PC and a large number of portable media devices, but not the iPod.
RealMedia: RealNetworks' file format, this requires the RealPlayer. It is supported on many cell phones.
Audible: The Audible file format was designed specifically for audio books, and consequently supports saved playback position, chapter marks, book marks, and other desirable features. Because it has been around for quite some time, it has lots of support in proprietary players and portable media players.
As mentioned earlier, your choice of codec and file format depend on what audience you're trying to reach and what features you want to use. For most folks, MP3 works well for audio because it plays on virtually every computer system and portable audio player. It doesn't support book marks or chapters, but most podcasts are short enough that they don't require that functionality.
For video, most folks are using QuickTime, again because of the near-universal support and because of the iPod, of course. However, some people are starting to experiment with other formats to see what they can do with the advanced functionalities they offer. Always offer the MP3 and QuickTime versions. If you want to play around with the advanced formats, offer them in addition to your standard podcast versions.