The two are unrelated. I have been using XVD for about 2 1/2 years now and every other codec that I have tried just doesn't look as good. I recently encoded the same hour long clip using Windows Media video 9 at a bitrate of 2300, Divx version 6 at 2400 and XVD at 1500- All with 2 pass encoding. It was no contest, XVD was absolutely superior and came the closest to matching the original source material.
For more information on the technology itself, go to
http://www.xvdcorp.com/xvdsite/te.html .