The ActiveX video codec is a small program that allows you to play videos in Internet Explorer by using an "ActiveX Object". A video codec refers to the software that lets your computer turn the information stored on your computer or sent over the Internet into the digital video that you watch. The ActiveX Video Codec is a video codec created by Microsoft which uses ActiveX to insert videos into websites.
The ActiveX Video codec has been standardized so if you have the latest version installed it should be able to decode a wide variety of common video formats you will encounter online. Every video online is "encoded" using one of many different techniques so it can be transmitted online in a way computers understand. The ActiveX Video Codec then "decodes" the video in a standard way, so that you can watch videos on many different websites without needing to download a specific "codec" for each one. The difference in video encoding also explains why different videos online can have dramatically different quality.
Try ActiveX Test to solve your ActiveX error.
ActiveX compatibility has become a standard for most videos online, and this has unfortunately made it a popular target for virus creators and other malicious figures on the internet. The techniques used to trick you include asking you to download fake versions of the ActiveX Video Codec that will infect your computer. Never download any ActiveX objects from a site you do not trust thoroughly. If you notice your computer behaving strangely after installing ActiveX, such as encountering pop-up messages or system errors, please run a complete anti-virus scan.