There's a lot of debate over this, and it really comes down to personal preference- what works best for you.
MPEG-1- older standard, been around for a while. I believe even my wife's cell phone can play MPEG-1 files, so just about anything under the sun these days can play them. They take comparatively little processor power, but may not look as good for the compression ratio you get. Can be played back natively on almost any OS in existence. A well-encoded, decently-high bitrate MPEG-1 is my personal preference for online distribution and other situations where smaller files are necessary.
XviD- 'derivative' of sorts of DivX. Generally considered, I believe, to yield better picture quality for the file-size than MPEG-1 (though I occasionally disagree with this). It is more processor intensive than MPEG-1, and also is less common on computers- a decent number of people will have to download a new codec to play it back. I've heard XviD/DivX on Macs has gotten considerably easier, but not as easy as would be nice.
MPEG-2- Intended for purposes such as DVDs, with extremely high bitrate and, as such, quality. Many contests that take digital submissions prefer them in DVD-quality setting MPEG-2 format. A well-encoded MPEG-2 should look pretty damn close to your original DVD/HuffYUV source files. MPEG-2s are less practical as a distribution method when it comes to downloading, because they are usually several times larger (at least) than their XviD/MPEG-1 counterparts. The con submission MPEG-2 of
WLtFO, for example, was around 160MB. If you drop the size down to distro size (352x240 or the likes), the filesize gets more reasonable- but it still tends to be larger than MPEG-1.
It's my personal opinion that MPEG-1 is the best method for distroing files, simply because just about any computer manufactured in the last 10 years or so can play it back fairly well without any special drivers or downloads.