[5] Due to its "powerful"[6] versatility and usefulness especially in the field of video processing (see below), PC World has referred to VirtualDub as "something of a 'Photoshop' for video files",[7] PC Perspective recommends it for its low overhead,[8] and nextmedia's PC & Tech Authority particularly praises it for its Direct stream copy feature to avoid generational degradation of video quality when performing simple editing and trimming tasks and the fact that VirtualDub "offers several valuable features that other packages lack, and helps you get quick results without any fuss or patronising wizards".

[9] VirtualDub is recommended for use by professional computer and tech magazines, guides, and reviewers such as PC World,[7] PC & Tech Authority,[9] PC Perspective,[8] technologies guide website MakeTechEasier,[10] freeware and open source software review site Ghacks,[11] Speed Demos Archive,[6] as well as third-party professional video production companies,[12] and the creators of Wine.

[13] Several hundred third-party plug-ins for VirtualDub exist,[14][15][16][17][18][19] including by professional software companies.

VirtualDub was made to operate exclusively on AVI files; however, a plugin API was added from version 1.7.2 which allows the import of other formats.

VirtualDub can also disassemble a video by extracting its soundtracks saving its frames into Truevision TGA or Windows Bitmap files.

Otherwise, VirtualDub is incapable of mixing dissimilar video files or adding transition effects between segments.

[25] Besides those basic features, its many third-party plug-ins make VirtualDub a "powerful"[6] open-source tool when it comes to linear video processing, and in fact most of the hundreds of third-party plug-ins available for VirtualDub are filters related to either aesthetic effects or cleaning, fixing, and restoring image quality, such as various denoising and sharpening methods targeted especially at analogue and digital video signal and film defects (be they related to VHS, faulty cables, a distorted analogue terrestrial or satellite TV reception, or digital compression), deinterlacing and fields manipulation, colorspace conversion and manipulation, reverse telecine aka IVTC, deflickering, deshaking, adding and removing logos and subtitles, analysis of video content, etc.

All of these processing features are fully batchable to apply the same effects on a large number of files.

VirtualDub was originally created by the author, then a college student, for the purpose of compressing anime videos of Sailor Moon.

Microsoft never identified any specific patent numbers that it believed to have been infringed, but speculation by others is that US 6041345  (expired in 2017) might be relevant.