DVD stands for Digital Versatile Disc. DVD-Video is it's default video/movie format. There is also DVD-Data, for computer related files and the soon to be released DVD-Audio, that can have nearly 500 minutes of CD quality audio on one disc. DVD is a format that will replace CD (compact discs) in the near future. DVD-Video is primarily designed to be able to carry an entire movie in broadcast quality video and audio - all on one shiny disc.
The now pretty much defunct (at least in western countries) VCD (Video-CD) format also allowed movies to be put onto usually 2 discs, and VHS is so popular, so why is DVD needed? Below is a comparison between VHS/VCD and DVD :
VHS
VCD
DVD
Video Resolution
~ 250-300 horizontal lines Analog
352x240 (NTSC) or 352x288 (PAL)
720x480 (NTSC) or 720x576 (PAL)
Video Quality
Similiar to VCD
Audio
Analog, 22kHz, 8bit Dolby Pro-Logic
Digital, 44kHz, 16bit Dolby Pro-Logic
Digital, 48kHz, 16bit Dolby Digital AC-3 DTS Surround
Media
Analog, magnetic tape : up to 4 Hr Volatile
Digital, laser optics : up to 55min per CD Non-Volatile
Digital, laser optics :
Single sided, single-layer : more than 2 Hrs
Single sided, dual-layer : more than 4 Hr
Double sided, single-layer : more than 4 Hr
Double sided, dual-layer : more than 8 Hr Non-Volatile