When you use Codecs the output format for audio is WAV or MP3. When you use Encoders the output format for audio is WMA. The difference between them is that Encoders use Microsoft Encoder Technologies and Codecs use third-party technologies like MPEG-Layer3 for example.

Audio compression using Codecs:

Applying no compression to the audio stream is ideal if you intend to edit the audio later.

If you intend to compress the audio stream select a codec from the list of all the audio codecs installed in your system. The selected codec will be responsible for compressing the audio stream.

Output is WAV or MP3.

Audio compression using Encoders:

Select an encoder from the list of audio encoders installed in your system. The selected encoder will be responsible for compressing the audio stream.

To better select an encoder read the detailed description and verify if that encoder matches what you'll record and how you intend to store and share.

Output is WMA.