A method of compression that will allow the complete original material to be recreated. For digital video, lossless compression techniques don’t do much to save disk space, so lossy compressions should be used.
For example, if you want to create a smaller AVI than you can get with no compression, but with the highest quality possible, you can also use a lossless codec like HuffYUV or Lagaraith. The files will still be significantly larger than standard compressed files, but good for use as intermediary files for editing and then compressing later.
Mostly however, lossless compression methods are used mainly on audio files, to keep the highest quality possible.
Examples of Lossless Compression
Huffyuv- Huffyuv is a Win32 lossless video codec, developed to replace uncompressed YCbCr as a video capture format. It was developed by Ben Rudiak-Gould and is published under the terms of the GNU General Public License (GPL). Since it is a lossless video codec, when it is decompressed, it is identical, bit for bit, with the content that the compressor used as input.
Lagarith- Lagarith is an open source lossless video Codec that was originally created by Ben Greenwood. It is one of few lossless video codecs and is slower then the rival Huffyuv in terms of encoding speed, but not by much.
ATRAC Advanced Lossless- At writing, ATRAC Advanced Lossless is the latest update to the ATRAC family of proprietary compression algorithms created by Sony Corp. While ATRAC Advanced Lossless is supported by Sony's Network Walkman, its support has not yet come to either the PlayStation Portable (PSP) or PlayStation 3 (PS3) consoles, which are marketed aggressively by Sony as entertainment-enhancing gadgets.
Monkey's Audio- Monkey's Audio is a lossless audio compression codec. Since it is lossless, there is no quality loss from the source audio once it is compressed. It achieves a compression rate of about 40%. The files use the .APE file extension. It's main advantage over lossy compression formats such as MP3 is obvious, the quality of MP3 is not near as good. However, the files are much larger than simple MP3 files which is why MP3 files would be more available online than APE files.
FLAC- To summarize FLAC, by encoding audio files with FLAC, the quality is exactly the same as the original audio file's quality is.
HD Lossless Formats
7.1 Surround can be encoded losslessly in both Dolby Digital TrueHD and DTS-HD Master Audio. The Dolby format is mandatory for HD DVD players, meaning all players must be able to handle it, while it's optional for Blu-ray players. DTS-HD support is optional for both. Like the lossy alternatives, audio is often encoded using only full frequency channels, leaving the listener's home theater equipment to divert the appropriate frequencies to an LFE channel when appropriate.