H.264 vs VP8
H.264 and VP8 are video codecs designed for high quality playback of videos using low resources. Both codecs are competing to gain more shares in browser-support, as browsers look to video codecs to support in HTML5. VP8 is backed by Google's WebM Project which "is dedicated to developing a high-quality, open video format for the web that is freely available to everyone."
VP8 was a video codec developed by On2 Technologies, but was later purchased by Google and released as open source. H.264 was developed by the MPEG-LA consortium and has gained footing in many places, including Safari, Chrome, and YouTube.
 Hardware Support
H.264 hardware decoding support is pervasive, not so for VP8. Note that without hardware support, devices displaying video must run decode implementations in software, at great cost to performance and power consumption.
H.264 decoding is royalty-free for internet content; general purpose encoders and decoders require a patent license. VP8, on the other hand, is completely free for use. Operating systems such as Microsoft Windows and Apple OS X bundle a H.264 decoding license. Free software encoders and decoders are available for both codecs, but do not include patent licenses. Because of this, many free systems (such as Fedora) do not include support for h.264.