VCD is an acronym for Video Compact Disc--a format that didn't catch on in North America or Europe, but was huge in Asia. A number of factors contributed to the format's Asian success, including the low cost of both compact disc media and VCD players. VCDs were also quite tolerant to humidity, unlike VCRs, which helped boost the format's success in Asia as well.
Oddly though, VCDs have recently started to increase in popularity in North America, but not in retail environments. Computer users can burn home movies and video files they've downloaded from the Internet to ordinary blank CDs, and then play them on their DVD players. Since most DVD players can play VCDs, virtually everyone who owns a DVD player can play VCDs as well.
Although both VCDs and DVDs are video files stored on optical media, there are some glaring differences between the two. Typical CDs cannot store as much information as a DVD, so the picture quality of a VCD movie will suffer. To remedy this problem, many VCD movies available in Asia are split on two discs to keep the quality as high as possible. Even when this is done, the quality is still nowhere near that of a DVD.
VCDs also don't have the bonus features that DVDs have. So, if you were to pick up a VCD in Asia, there wouldn't be commentary tracks, deleted scenes, or a menu with chapter selections. VCDs don't have region coding though, so regardless of where you live, you can watch a VCD.