Microsoft DirectX (Direct eXtension) is a collection of application programming interfaces for handling tasks related to multimedia, especially game programming and video, on Microsoft platforms. Direct3D (Graphics module of DirectX) is a direct competitor of the OpenGL standard, maintained by the Khronos Group.
Direct3D is widely used in the development of computer games for Microsoft Windows, Microsoft Xbox and Microsoft Xbox 360. DirectX is also used among other software production industries, most notably among the engineering sector because of its ability to quickly render high-quality 3D graphics using DirectX-compatible graphics hardware.
Both the DirectX runtime and software development kit are available free of charge, but are proprietary and closed-source software. The DirectX runtime was originally redistributed by computer game developers along with their games, but later it was included in Microsoft Windows. Game developers still often include an updated version of DirectX that prompts for installation automatically after the game installation to ensure proper program functionality.
The latest release versions of DirectX, DirectX 10 and DirectX 9Ex, are exclusive to Windows Vista. Microsoft claims the reason for this is that there have been extensive changes in the Windows graphics architecture and introduction of the Windows Display Driver Model.

Components
In late 1994 Microsoft was just on the verge of releasing its next operating system, Windows 95. The main factor that would determine the value consumers would place on their new operating system very much rested on what programs would be able to run on it. Three Microsoft employees — Craig Eisler, Alex St. John, and Eric Engstrom — were concerned, because programmers tended to see Microsoft's previous operating system, DOS, as a better platform for game programming, meaning few games would be developed for Windows 95 and the operating system would not be as much of a success.
DOS allowed direct access to video cards, keyboards and mice, sound devices, and all other parts of the system, while Windows 95, with its protected memory model, restricted access to all of these, working on a much more standardized model. Microsoft needed a way that would let programmers get what they wanted, and they needed it quickly; the operating system was only months away from being released. Eisler, St. John, and Engstrom conspired together to fix this problem, with a solution that they eventually named DirectX.
The first version of DirectX released was shipped September of 1995 as the Windows Games SDK. It was the Win32 replacement for the DCI and WinG APIs for Windows 3.1. A development team at ATI brought fundamental game graphics technology to the attention of Microsoft. The development of DirectX was led by the team of Eisler (development lead), St. John, and Engstrom (program manager). Simply put, it allowed all versions of Microsoft Windows, starting with Windows 95, to incorporate high-performance multimedia. Eisler wrote about the frenzy to build DirectX 1 through 5 in his blog.
Prior to DirectX's existence, Microsoft had already included OpenGL on their Windows NT platform. At the time, OpenGL required "high-end" hardware and was limited to engineering and CAD uses. Direct3D (introduced by Eisler, Engstrom, and St. John as an alternative to SGI's OpenGL) was intended to be a lightweight partner to the back then slower OpenGL for game use. As the power of graphics cards and the computers running them grew, OpenGL became the de-facto standard and a mainstream product. At that point a "battle" began between supporters of the cross-platform OpenGL and the Windows-only Direct3D, which many argued was another example of Microsoft's embrace, extend and extinguish business tactic (see Fahrenheit or Direct3D vs. OpenGL). Nevertheless, the other APIs of DirectX are often combined with OpenGL in computer games because OpenGL does not include all of DirectX's functionality (such as sound or joystick support). However, the combination of OpenGL and OpenAL for this purpose is becoming increasingly popular.
In a console-specific version, DirectX was used as a basis for Microsoft's Xbox and Xbox 360 console API. The API was developed jointly between Microsoft and NVIDIA, who developed the custom graphics hardware used by the original Xbox. The Xbox API is similar to DirectX version 8.1, but is non-updateable like other console technologies. The Xbox was code named DirectXbox, but this was shortened to Xbox for its commercial name..

History
Notes:

DirectX 4 was never released. Raymond Chen explained in his book, The Old New Thing, that after DirectX 3 was released, Microsoft began developing versions 4 and 5 at the same time. Version 4 was to be a shorter-term release with small features, whereas version 5 would be a more substantial release. The lack of interest from game developers in the features slated for DirectX 4 resulted in its being shelved, and the corpus of documents that already distinguished the two new versions resulted in Microsoft choosing to not re-use version 4 to describe features intended for version 5.
The version number as reported by Microsoft's DxDiag tool (version 4.09.0000.0900 and higher) use the x.xx.xxxx.xxxx format for version numbers. However, Microsoft's site at http://msdn.microsoft.com/archive/default.asp?url=/archive/en-us/directx9_c_Dec_2004/directx/directxsdk/dxandxp.asp claims that the registry always has in the x.xx.xx.xxxx format. Put another way, when the above table lists a version as '4.09.00.0904' the registry may have it as '4.09.0000.0904'. Release history
Hardware manufacturers have to write drivers for and test each individual piece of hardware to make them DirectX compatible. Some hardware devices only have DirectX compatible drivers (in other words, one must install DirectX in order to use that hardware). Early versions of DirectX included an up-to-date library of all of the DirectX compatible drivers currently available. This practice was stopped however, in favor of the web-based Windows Update driver-update system, which allowed users to download only the drivers relevant to their hardware, rather than the entire library.
Some drivers only support one version of DirectX. Prior to DirectX 10, DirectX was considered backward compatible, which means that newer versions supported the older versions. For example, if one had DirectX 9 installed on one's system and ran a game that was written for DirectX 6, it would still work. The game used what was called the DirectX 6 "interface". Every version of DirectX supported every previous version of DirectX. This is a positive consequence of the COM model used for this API.
With Windows Vista and the radically changed Direct3D 10, this is no longer possible for handling 3D graphics. DirectX 10 therefore also supplies the Direct3D 9 API so older games and applications can still use graphics hardware.

Compatibility
For the list of games that will support DirectX 10, see List of games with DirectX 10 support.
Windows Vista ships with DirectX 10 and is the only version of Windows for which it is offered, and it has a large number of changes: DirectInput will be deprecated in favor of XInput, from the Xbox team. Likewise, DirectSound will also be deprecated in favor of XACT. DirectX 10 has also dropped support for hardware accelerated audio, opting instead to render sound in software on the CPU.

DirectX 10
In order to achieve backwards compatibility with previous versions of Direct3D, DirectX 10 actually contains three versions of Direct3D:

Direct3D 9: emulates Direct3D 9 behavior as it was on Windows XP. Details and advantages of Vista's Windows Display Driver Model are hidden from the application if WDDM drivers are installed. This is the only API available if there are only XP graphic drivers (XPDM) installed, after an upgrade to Vista for example.
Direct3D 9Ex (previously known as 9.0L): allows full access to the new capabilities of WDDM (if WDDM drivers are installed) while maintaining compatibility for existing Direct3D applications. The Windows Aero user interface relies on D3D 9Ex.
Direct3D 10: Designed around the new driver model in Windows Vista and featuring a number of improvements to rendering capabilities and flexibility, including Shader Model 4. Direct3D
During 2002 Microsoft released a version of DirectX compatible with the Microsoft .NET Framework, thus allowing programmers to take advantage of .NET features (the use of the C# programming language) simultaneously with DirectX development. This API is known as "Managed DirectX" (or MDX for short) and performance is claimed to be 98% of that of native DirectX software. The design ideas behind Managed DirectX can be seen in the newer framework XNA which also implements Managed DirectX along with other technologies aimed at making game development easier.
In December 2005, February 2006, April 2006, and August 2006, Microsoft released successive updates to DirectX that is designed for the .NET 2.0 framework. In older versions, DirectX was split apart into different modules; this has changed with the .NET 2.0 version, as it is now a single file and is much easier to use. However, the .NET 2.0 version of DirectX is not a finalized version; it is still a beta.
During the GDC 2006 Microsoft presented the XNA Framework, a framework built on Managed DirectX that is intended to assist development of games by making it easier to integrate DirectX, High Level Shader Language (HLSL) and other tools in one package. It also supports the execution of managed code on the Xbox 360. The XNA Game Studio Express RTM was made available on December 11, 2006, as a free download for Windows XP.

.NET Framework
There are alternatives to this framework, some more complete than others. While there is no unified solution that will do everything DirectX does, with a combination of libraries - SDL, OpenMAX, OpenML, OpenGL, OpenAL, FMOD, etc. - one can implement a comparable but cross-platform and frequently free/open source solution.
There are also alternative implementations that aim to provide the same API, such as the one in Wine.

See also

Simple DirectMedia Layer
OpenMAX
OpenML
OpenGL
OpenAL