COde DECode or COmpress DECompress (whichever?!?!)- they do exactly that, code and compress analogue files into a digital format and decode and decompress them back to analogue (for viewing/listening). Just do a google on mac codecs and you should find plenty.
If you actually look at the message you're getting though, you'll find that the media player does not support the codec - so contrary to the above it's most likely your version of media player which needs upgrading to a version which does support this codec - not a new codec that's required .
Bear in mind some videos are just encoded badly or use an obscure codec which requires you to sign up to a site (porn vids etc.) to be able to use it.
Try getting the latest version of Media Player.