I'm going to stick my neck out and argue, chronologically:
QuickTime, which launched in 1991 and therefore predates Video for Windows by about a year, introduced a fairly general framework for containers and codecs, and an initial video codec which was a fairly simple thing. No motion compensation, just altering or not altering different 16-pixel parts of the display in each frame, with differing precisions (ranging between a single colour for all 16 to a different colour for each pixel).
Cinepak, from 1992, was the first codec added to both QuickTime and Video for Windows that promised 'full-screen' (i.e. 320x240), 'full-motion' (15fps) video. It's actually broadly similar to QuickTime in just dividing the display into macroblocks and assigning each a particular fill, then modifying those fills frame-by-frame, but there's an extra level of indirection as to block contents, a fixed-size codebook and codebooks receive only sequential updates from one frame to the next, key frames aside.
Cinepak is the codec you're used to from the Saturn, Mega CD, 3DO, etc — everything that produced full-motion video in software.
MPEG-1 was also standardised in 1992 and introduces a substantial number of new ideas:
- use of the frequency domain to describe macroblocks in terms of their significant frequency content (via DCT in this case);
- sampling luminance at a greater frequency than chrominance;
- motion estimation of macroblocks from frame to frame — macroblocks can now be updated from frame to frame not only by content but by position;
- bidirectional frames, which describe a frame not just as a mutation from the prior, but as a combination of mutations from the prior and the next.
That adds up to a substantial extra processing burden, and an extra buffering burden for bidirectional frames but it gets you "VHS quality video" (i.e. 320x240, 30fps) at CD-ROM read speeds, where Cinepak could do only half the frame rate at the same data rate.
A desktop PC could be equipped with something like a ReelMagic card for MPEG-1 playback; consoles like the Philips CDI, Saturn and 3DO tended to have a slot where one could add an after-the-fact MPEG decoder, primarily for playing Video CDs.
A Pentium can decode MPEG-1 in software; a 486-class machine can do something between Cinepak and MPEG-1.