The MNG animation format grew out of the more successful PNG project as a way to provide animation support to compete with animated gif on the web. It basically allows encoding of both png and jpeg images and then construction of frames for display through alpha composition of those images and previously constructed frame data, including offsets and subimages. There is some crude scaling support, mostly as a way to implement gradients, and a delta-png mode for encoding minor frame-to-frame changes.
There are also some simpler profiles that are just a sequence of full-frame images at a constant framerate.
We are interested in an Ogg encapsulation of MNG for a number of reasons. The simplest is that MNG is an excellent format for 'traditional' cel-style animation, especially with fixed background plates, but within itself provides no audio support. Multiplexing such an animation with a Vorbis audio track in Ogg makes an obviously complete format. One could also put vorbis data into the MNG format as well of course "VHDR, VDAT, ..., VEND" but we have other purposes in mind.
Although most efficient in compressing animation, MNG's support for both high-quality PNG lossless compression and subsumption of mjpeg make it a good source format for working with video in the Ogg framework. Combined with FLAC audio we have a good mastering format, and something that can be piped to encoders in a single stream.
Finally, we want to support 'slideshow' tracks and graphic overlays over video in Ogg Theora. So one can do DVD-Video style graphic subtitles if you want precise control over the appearance (only with alpha blending so they look much better) or even complicated graphical annotations of video, like MTV's "Pop Up Video" series. On the other side, one can do a series of slides with music or commentary, for example, a webcast of a conference presentation can include both video of the speaker and full-resolution images of the slides as they are presented, a much better solution than the current practice of cutting periodically to an illegible version in the video feed itself.