The file extension RM stands for Real Media. It is primarily used by the software program Real Player. Real Player streams videos on the Internet which users can watch directly. The files having RM extension are commonly used in conjecture with Real Audio and Real Video files. You can download real media videos in this format and view them later. Such files can also be saved as audio and listened to as music on some audio players. The files with this extension allow users to watch video streaming on the Internet. There are a few media players that have the ability to run them; however majority of the media devices and programs do not recognize this format including MP3 players. So, if you want to load an audio or video RM clip onto your MP3 player, you need to convert them to a more recognized format like MP4.
The file extension MP4 is used for MPEG-4 video. The MPEG-4 part 14 is a multimedia container standard which is specified as a part of MPEG-4. It is normally used for storing digital video and digital audio streams especially the ones defined by MPEG. However, this format can also be used for storing other data like still images and subtitles. MP4 like almost all other container formats allows streaming over the Internet. A different hint track is used for including the streaming information in the file for it. The container format is really called MPEG-4 part 14 but as the official extension is MP4, it is generally referred to as MP4.
The main difference between the two formats is that RM can run only on a couple of media players while MP4 runs on almost all the programs and media devices.