The VP8 vs. H264 Video Codecs: A Comparison
Jan Ozer from StremingMedia concluded that the differences are negligible, and others, such as John Keck from [H]ard|OCP noted some differences, but agreed that VP8 is "not far off at all" and even then, is only noticeable in high motion videos.
For low motion videos, there is no difference to be noted. Although not extensively tested at this point, the conclusion thus far is that VP8 is better than good enough for prime time. It's royalty free, has industry backing, and looks like it will be a winner in the long run.
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