Much the way firms battled in the 1980s over VHS and Betamax video formats, tech rivals are fighting over the technology used to deliver and display Web video. Currently, video-streaming services like Netflix Inc. and Google’s YouTube pay patent royalties, as do makers of Blu-ray disc players and other hardware.

These firms pay royalties to an organization called MPEG LA, which is the target of the formal antitrust probe, the people familiar with the matter said. MPEG has amassed pools of patents covering widely used video formats and collects royalties for its members, which include Apple Inc. and Microsoft Corp.

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Though Paramount Pictures has denied reports that it plans to abandon the next-generation DVD format, news of an escape clause in its HD DVD contract allowing it to release films on Blu-ray has the industry wondering aloud about the format’s continued viability.

And for good reason. Earlier this week Universal’s HD DVD-exclusive contract ended. And last Friday, on the eve of the Consumer Electronics Show, Warner Bros. stunned the industry by announcing plans to end support of the format entirely in June. “[That] maybe the pivotal event that resolves the format war,” said Thomas Coughlin of Coughlin Associates. “It certainly changes the rules and the playing field. I think everyone is trying to reassess what this means–including the HD DVD guys. [If Blu-ray does come out on top] it would be poetic justice after the Betamax vs. VHS war. That time, Sony lost.”

But is it truly the format’s death knell? Ovum analyst Carl Gressum says no. “There is a lot of speculation whether this is the end of HD DVD,” he said. “It is not, but we are getting dangerously close to a ‘chapter 11’ for the group. If the other supporting studios now decide to drop HD DVD, the situation will turn dire, and HD DVD could become more of a replacement to DVD on the PC client than as a movie-distribution playback format.”

UPDATE: Universal Pictures flatly denies it’s abandoning the HD DVD format. Said Ken Graffeo, executive vice president of HD strategic marketing for Universal Studios Home Entertainment, “Contrary to unsubstantiated rumors from unnamed sources, Universal’s current plan is to continue to support the HD DVD format.”

Today, parents can use sleek, light video cameras that capture and record high-definition footage directly onto tiny memory cards, which hold much more than an old VHS tape. Yet many people hesitate to buy new camcorders, scared off by steep prices and intimidating technology.

This week, I tested a simple video camera that fits into the palm of your hand and lets you record footage almost as easily as you share or save it: the Flip Video Ultra from Pure Digital Technologies Inc. (www.theflip.com). This rectangular-shaped video camera comes in two models that capture 30 or 60 minutes each and cost $150 and $180, respectively. Both models are available starting today from stores like Amazon.com and Best Buy.

The Flip Video Ultra’s front has a camera lens and microphone; the back, a 1.5-inch viewing screen, four directional arrows, delete and play buttons. A USB plug pops out from its side so you can connect it directly to a computer’s USB port without cables.

Special software that opens when the camera attaches to a computer walks users through sharing or saving clips in a few straightforward steps. And if that’s still too complicated, the device can be dropped off at affiliated stores (like CVS) where footage is extracted and turned into a DVD.

This tiny video camera made it a pleasure to record startlingly good footage for a camera of its size both indoors and outside. It’s designed to be held comfortably in front of you, which didn’t make me feel removed from the event I was recording like many other video cameras. Not without flaws, the Flip’s 2x digital zoom isn’t ideal for shooting from afar, and on more than one occasion its software froze up on Windows PCs and Apple Macs. But once I got going, I started shooting videos in a new way, unobtrusively using it and then fitting the Flip into small purses. Saving and emailing footage was a breeze after a few initial hiccups.

Flip Video Ultra from Pure Digital Technologies

This gadget, however, is not only non-HD, its footage isn’t as high resolution as that of a standard camcorder. Its quality is great for email and Web posting, but won’t fill up a big TV or satisfy serious amateurs. This is the Flip’s tradeoff for size, price and simplicity.

The Flip Video Ultra is an improvement on the Flip Video, which Pure Digital introduced in May. Though it costs $30 more, the newer version features higher-quality sound and video (footage is half as compressed as that on the old Flip), a transflective screen with a better resolution and improved video-processing technology. The new Flip also integrates direct uploads to YouTube in its software program.

I took the new Flip along with me on a business trip to California and carried it around Washington, D.C., shooting in different environments: inside a dark auditorium at a press event; outside at dusk overlooking the San Francisco skyline from a rooftop barbeque; in my house at nighttime; and during a visit to Google headquarters with my boss, Walt Mossberg. The Flip worked well in each situation.

This video camera measures roughly four inches high by two inches wide and an inch deep, and the 60-minute version comes in black, white, pink and orange; 30-minute models only come in black and white. Though the Flip Video Ultra doesn’t have a flash, it’s designed to perform well under circumstances with low light because Pure Digital assumes most users will be recording indoors. It captures in 640×480 resolution at 30 frames per second.

I used the 60-minute Flip. In capture mode, an on-screen message tells how many minutes remain on the camera. In playback mode, captured clips are labeled with duration and numerical order, such as “Video 21 of 24.” Hitting the Delete button twice while a clip is on screen erases it.

In a couple instances when I wanted to shoot something farther away, I was a little dismayed by the video camera’s weak zoom. But in most situations I was recording things that were nearby, so this issue wasn’t a big deal. Parents who are heading to dance recitals with this Flip will need seats in the front.

The exciting part of capturing video is sharing it with others, and Pure Digital’s built-in software does a superb job of this. I plugged my Flip into four computers running Microsoft’s Windows XP and Vista and Apple’s Mac OS X operating systems and opened the camera’s software to see thumbnail images of my clips. Each clip can be played or selected for saving or sharing. Only on Windows XP did the software automatically open when I attached the camera; opening it on the other platforms required extra steps.

The Save Videos option asked me to choose whether I wanted to save clips to my computer or if I wanted to save them in a smaller format for emailing to someone else. Saving these videos took a little time, but nothing that was too much of a hassle.

Sharing videos took a little longer. Three choices within the Share Videos menu offered to walk me through the steps for sharing videos via emails with links, in an electronic greeting card with embedded video or online using YouTube or other Web sites.

The first time I plugged the Flip into each computer I went through a few extra set-up steps to get the software started. I encountered a few instances during which sending videos to friends via email took a little longer than I expected. Once, on my iMac, it took more than 30 minutes to send a video that was two minutes and 36 seconds. But this was the exception; most of my videos that were roughly that long or shorter took only about five to 10 minutes to be sent.

Editing footage in Pure Digital’s software works for average users who might do some simple editing, like shorten a video or cut out a certain part. Easy-to-use slide bars adjust start and end times for videos, and edited versions of clips can be saved in addition to the originals. The company says that if clips are converted to standard Windows or Mac formats they should be editable in any standard video- editing software.

Muvee software is also built into Pure Digital’s software to let Windows users choose a bunch of clips, select music and a theme for the movie and watch as an automatically organized montage of clips plays.

Pure Digital plans to continuously issue software updates; the next is coming at the end of the month. But as is, this tiny video camera delivers a remarkably good picture on a device that anyone can use. With this product, Pure Digital Technologies again shows the value of simplicity, this time with the bonus of better technology.

Email mossbergsolution@wsj.com

Sony wants me to publish my films on HD DVD.”

–Joone, founder of adult-entertainment company Digital Playground

If history is any guide, the victor in the battle over the next-generation DVD optical-media standard won’t be determined by the Hollywood studios, but by performers with names like Flick Shagwell and Wendy Whoppers. The adult-entertainment industry, after all, is widely credited with tipping the balance of the videotape format war in favor of VHS, giving it the critical mass of support it needed to check the advance of Sony’s competing Betamax format and turn the battle into a rout.

It should come as little surprise, then, that Sony has reportedly begun offering a bit of technical support to the Japanese porn industry, which has apparently been having a bit of trouble mass-producing its products for Blu-ray Disc. “In Japan, there are some problems. Companies cannot press Blu-ray Discs because they cannot touch adult-related contracts,” Kiyotaka Konno, director of administration for Japanese DVD replication outfit Assist Corp., told Network World. “So we asked some makers in Taiwan to do the work, and then we import the discs back to Japan. The Taiwanese company was able to obtain a pressing machine from Sony and will start mass production in August.”

So it looks like we’ll see Blu-ray tentacle porn after all.

An interesting turnabout for Sony, though the company claims its longstanding policy against manufacturing DVDs or videocassettes with adult content remains unchanged. Lucky for Sony that policy doesn’t extend to other countries–especially when HD DVD has taken an early lead over Blu-ray Disc in the battle to become the next-generation DVD format.