The Apple Intermediate Codec is a high-quality 8-bit 4:2:0 video codec used mainly as a less processor-intensive way of working with long-GOP MPEG-2 footage such as HDV. It is recommended for use with all HD workflows in Final Cut Express, iMovie, and until Final Cut Pro version 5. The Apple Intermediate Codec abbreviated AIC (by users, Apple Engineers don't use the abbreviation) is designed by Apple Inc. to be an intermediate format in an HDV and AVCHD workflow. It features high performance and quality, being less processor intensive to work with than other editing formats. Unlike native MPEG-2 based HDV - and similar to the standard-definition DV codec - the Apple Intermediate Codec does not use temporal compression, enabling every frame to be decoded immediately without decoding other frames. As a result of this, the Apple Intermediate Codec takes three to four times more space than HDV.
The Apple Intermediate Codec is officially available only on the Mac OS X platform but can be read on other platforms such as Windows or Linux, using FFmpeg. All Mac OS X software which makes use of the QuickTime codec libraries - such as Final Cut Studio, Final Cut Express, and iMovie - can use the Apple Intermediate codec.
The Apple Intermediate Codec was used because it was less processor intensive; as the compression scheme did not need the next frame to be displayed. It's still used in the iLife package, specifically iMovie, but it is rarely used in Final Cut Pro as of Version 6 since it now uses the ProRes codecs instead of the Apple Intermediate Codec, though some versions of Final Cut Pro (HD 4.5 through 5) and Final Cut Express use them regularly.
HDV (High Definition Video) is a video format that allows you to record HD video in standard DV tape. Its compression scheme is called long-GOP MPEG2. HDV is an HD format created by a consortium of manufacturers including Sony, JVC, Canon, and Sharp. HDV allows you to record an hour of HD video on standard mini-DV videocassettes. You can connect an HDV camcorder to your computer via FireWire, so you can capture and output just as you would with a DV device.