VCD stands for VideoCD (version 2.0 to be more specific). VideoCD is a standard developed in early 1990's that allows regular CD to contain 74 minutes of video and audio. Both, video and audio, are encoded in MPEG-1 format and stored on the CD in specific format.
VideoCDs can be played in most of the stand-alone DVD players, in all stand-alone VCD players and in all computers that have CD-ROM drive. This is the VCD's strong point against DivX format which is based on MPEG-4 audio/video encoding technology.
VideoCD resolution is in PAL format 352 x 288 pixels with 25 frames/second. In NTSC format it is 352 x 240 pixels with 29,97 frames/second (except in NTSC film format, where the framerate is 23,976 frames/second.
Audio is encoded with bitrate of 224 kbit/sec in MPEG-1 Layer2 format (in both PAL and NTSC versions). Video is encoded with bitrate of 1150 kbit/sec.
VideoCDs are pretty rare in western countries -- basically only VCDs you see in the Europe or in the U.S. (except in NYC's Chinatown, which is a true VCD paradise in middle of the western city :-) are illegal copies or porn movies. On the other hand, VCD is a very popular method for movie distribution in China, Hong Kong, Singapore, Malaysia, etc.. Some studios release some of their movies officially for VCD format in Asia. It has almost completely replaced regular VHS format in Asia, because cheap VCD recorders are widely available there. VideoCD's successor is called SuperVideoCD.