I really don't get how to use this, I've looked this up but all i see are codecs this, codecs that, it's its confusing.
Maybe start with a free program with a few codecs built in. Get handbrake. It is a free download. You can experiment with a few different ways to encode video files. I don't recall if it does loss-less or not.
A video file starts as raw footage with no codec (encoding) much like a image from a SLR camera does. But to make it simple, lets use BMP instead. These bitmapped photo files have lots of redundent data. They are inefficient and large so most people convert them to something like a jpeg. A jpeg (aka .jpg) is a lossy compression. Meaning some data which is thought not to matter is discarded this reduces some fine details and introduces a little noise in the image. Some people want to delete nothing but make their files a little smaller. They might use convert their bmp files to smaller but just as detailed TIFF files. Video is the same way. There are lots of ways to encode your file. Some throw out data, some do not. Those that do not are called loss-less. If you google the terms you can read more.