H.264 is a very demanding for high resolution video signals and can become excessive for the processor. By letting the video card take the load of the processor you can use the system in a better way e.g. a HTPC that work with many applications at the same time.
"H.264, which is also known as the Advanced Video Codec (AVC) specification or MPEG-4 Part 10, is one of the digital video codecs specified for the Blu-ray and High Definition DVD (HD DVD) formats. H.264 delivers two to three times the compression efficiency of the MPEG-2 standard, which is used to create current DVD videos. H.264 has been adopted by both the DVD Forum for HD DVDs and the Blu-ray Disc Association for Blu-ray Discs, and VC-1 has also been adopted by the DVD Forum for HD DVDs. "
So far only ATI has supplied support for H.264 acceleraion with its video cards through driver updates, while NVIDIA only has displayed support with its internal tests and demonstrations. However NVIDIA has now launched a new version of its PureVideo decoder that adds support for hardware acceleratino of H.264 signals.
The new PureVideo decoder offers hardware acceleration of H.264 signals for all GeForce 6/GeForce 7 circuits for stationary and portable computers plus NVIDIA's nForce 6150 chipset.
Now we're just waiting for HDCP support so that you can actually use the H.264 acceleration when Blu-ray and HD DVD arrive.
:: Download NVIDIA's new PureVideo decoder (30 day trial)