MoviX2 is a small Linux distro on CD aimed at playing multimedia: when you boot your PC with the MoviX2 CD the distro should be able to start X-windows and launch gmplayer, the GUI interface to mplayer, so that you are left with a nice user-friendly interface you can control by your mouse.
At that point you can safely remove the MoviX2 CD and play all multimedia files you want: DVD [no zone constraint], VCD, DivX, avi, mpg, mp3, ogg etc.
The idea of MoviX2 came to solve two different problems arising from MoviX.
First of all with MoviX you cannot watch DVDs, mainly because you have no space to copy vob files in a 700MB MoviX CD.
Furthermore, those of you who have already a big archive of multimedia CDs would probably not happy at the idea of "MoviX-ing" them all.
MoviX2 solves both problems: it is not made to be embedded with the movie in a CD but just to be loaded in a PC to transform it in a true MultiMedia Box, so after that you can extract from your CD/DVD-ROM the MoviX2 CD and insert & play every DVD/VCD/CD you have around.
So remember: MoviX2 is not an "improved" version of MoviX nor a replacement for it! It has a totally different philosophy behind, the mplayer binary is compiled with different options and it is used for different purposes.
The name is similar because anyway they are both related to Unix and movies :-)
The exponent on the X of MoviX2 is there to indicate that there are two Xs in MoviX2: one is the X of Unix and the other is the X of XFree86 :-)