code 1 dvds are made in the states for distribution there and canada and are all uncut. u see, there's no way they can censor a code 1 disc cos its already pressed. the only way to cut it would be to re-press it again into a code 3 or local disc.
anyway, code 3 dvds are meant for distribution in the South-East Asis region and thus some of them (though not all) are usually cut for Asian audiences, depending on their content. For example, The Exorcist is available on both code 1 AND 3 but trust me, both versions are different. =)
quality wise, code 1 discs are better too.
so my advice is....stick to code 1. unless u'r buying "safe" stuff like cartoons or docus.
There are 8 regions (also called "locales"). Each region is assigned a number. Players and discs are often identified by the region number superimposed on a world globe. If a disc plays in more than one region it will have more than one number on the globe.
1: U.S., Canada, U.S. Territories
2: Japan, Europe, South Africa, and Middle East (including Egypt)
3: Southeast Asia and East Asia (including Hong Kong)
4: Australia, New Zealand, Pacific Islands, Central America, Mexico, South America, and the Caribbean
5: Eastern Europe (Former Soviet Union), Indian subcontinent, Africa, North Korea, and Mongolia
8: Special international venues (airplanes, cruise ships, etc.)
Code 4 DVDs typically for Aussie market (among others) and they are more liberal about this nudity thing ... actually US is pretty strict about nudity and stuff (surprising since US are also the largest producer & consumer of porn).
Anyway, real life example - bought a R4 disc (Spiderman) when in Australia which does not function correctly if DVD player set on Progressive Scan, and won't play. Finally got a replacement DVD player and it plays on the new one (also on Progressive Scan) but the quality is subjectively lesser than a R1 disc. Ok, maybe I wasn't comparing apples to apples as I don't have the R1 Spiderman disc, but compared to other R1 discs I have, I noticed more artifacts and blockiness.
For anyone who are serious about DVDs, suggest that you look into a Progressive Scan-capable TV and DVD player - the quality is noticeably better.