Kieran Kunhya
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This is correct. H.264 is a (very) complicated standard that has multiple levels of compliant files. x.264 is an h.264 encoder that is highly optimized for good visual quality to the human eye at lower bitrates. In other words it's a very efficient encoder.
Quicktime also has an h.264 encoder built in that also produces h.264 compliant files, but it's optimization is very poor in comparison to x264. Keep in mind that the data being generated are both compatible h.264 streams, but one is done a lot better. Imagine 2 people, one with really good handwriting, and college doctoral writing skills, and another with poor handwriting skills and is as proficent as a 5th grader. They can both produce sentances that humans can read, but one is going to produce a better result.
He's talking about licensing here I believe, not quality.