Vimeo, one of the classiest players in the online video world, is now offering High Definition transcoding for user uploaded video. At 4 times the industry standard bitrate, the new videos look really nice. Unfortunately, the HD quality videos can only be viewed on the Vimeo site and cannot be embedded in HD elsewhere. I hope that will change.

Owned by IAC, Vimeo can afford the extra costs incurred and its community of artists is sure to appreciate the option. The new service will presumably pay for itself as an increasingly competitive high-end video ad unit, something Vimeo has been put to use for in some cases already. It also appears that the HD vids are being sponsored at launch.

The new Vimeo videos look great full-screen and the ability for viewers to toggle between HD and standard resolution depending on their bandwidth is a very nice touch.

The other online video service that's worked hardest on its encoding quality is probably Brightcove - but its usability is challenging enough and its business strategy confused enough that there's likely little overlap between Vimeo users and the Brightcove community.

I heard about the Vimeo HD first via Scott Beale's Laughing Squid blog, a great place to learn about all thing artistic and online. For more on Vimeo see also CenterNetwork's in-depth comparative review of Vimeo and competitor Viddler last week. Viddler has offered HD for some time but is earlier in the development of its community.