First of all, I was under the impression that .ogg was the extension commonly used to refer to an Ogg Vorbis audio file, and that for a video file containing ogg vorbis audio the commonly accepted (but I'm not sure about standardized) extension was .ogm.
OGG is a container format, which means it can contain any number of things. The primary ones are Vorbis, for audio, and Theora, for video. Vorbis has become synonymous with .ogg since it was available for so long as the only option. It was never intended to be all there is though, and that is readily evident to anyone who as ever written code for OGG support.
OGM is a container format, OGG is a container format, but they are totally different. Whatever morons started naming OGG movies as .ogm really messed things up for everyone. Especially since there is a real container format called OGM which uses .ogm. The name change was likely done to cover up badly written OGG decoders, and Windows' ignorant reliance on file extensions to determine file type. The specs dictate that OGG is a container and may contain more information that you can deal with. In that case you are to write your code to handle what you know, and silently skip the rest.
That means that something like WinAmp should play an OGG movie. It would only play the audio portion, but it would play. If it doesn't then it's a very poorly written decoder. Is that a problem with WinAmp, yes. Do we have a similar problem with FS2_Open, yes. Our audio steaming code for voices and music can't handle using a Theora movie as just audio. That is already on the todo list and will be fixed, but we are still just as guilty about not supporting the format properly.
1. What makes it so special/different from avi, another capsule format, that warrants dropping avi support?
Already been answered. Technically though, we never had AVI support. We simply faked it.
2. I notice that the avi cutscenes use MP3 audio and XviD video, is it the use of MP3 audio that is going to cause avi to be abandoned, in favor of the open ogg vorbis audio format?
With the OGG container we are using Theora for video and Vorbis for audio. Vorbis counts for both movies, sound effects, music, voices ... everything. We can't support MP3, we never have, and we never will.
3. Then would that also imply that avi and ogg cutscenes have the same video data, and only a different audio stream?
I don't currently have a copy of the 'ogg' cutscenes to check this with, but I'm curious if these are Ogg capsules with vorbis audio and xvid video, then why are they not referred to as 'ogm' instead of just 'ogg', or 'ogg/xvid'. Hope I didn't confuse any brave souls who tried to read this after all.
No, we are using Theora for video. We can't and won't use XviD. We can't and won't use DivX. Our only real option for a current and advanced video codec was to use Theora. It wasn't our only option overall, but is far better for us. Since we already have Ogg and Vorbis support embedded in the game, all we had to do was add basic Theora support, as we already had the other components. This means that by using Theora we not only got an advanced and properly supported video codec in the game, but we did using the least amount of resources possible, reusing the existing container and audio components and simply adding a video component to it.