No, this is not just a cheap rip-off of Kodak. The name "codec" is short for "coder-decoder," which is pretty much what a codec does. Most audio and video formats use some sort of compression so that they don't take up a ridiculous amount of disk space. Audio and video files are compressed with a certain codec when they are saved and then decompressed by the codec when they are played back.
Common codecs include MPEG and AVI for video files and WAV and AIFF for audio files. Codecs can also be used to compress streaming media (live audio and video) which makes it possible to broadcast a live audio or video clip over a broadband Internet connection.