Theora is an open video codec being developed by the Xiph.org Foundation as part of their Ogg project (It is a project that aims to integrate On2's VP3 video codec, Ogg Vorbis audio codec and Ogg multimedia container formats into a multimedia solution that can compete with MPEG-4 format). Theora is derived directly from On2's VP3 codec. Currently, the two are nearly identical, varying only in framing headers, but Theora will diverge and improve from the main VP3 development lineage as time progresses. [Source: Theora.org FAQ]
See also Ogg Vorbis.