Compact Disc Interactive.
This CD player standard ("green book") was developed by Philips and Sony in mid 1980s.
It was an open standard for multimedia CD-ROMs to be used on players attached to televisions. The CD-ROMs could contain all sorts of multimedia (for some reason, full screen MPEG video was considered optional but was nevertheless supported in most players through a digital video extension cartridge).
The players were based on Motorola 68000 CPU series (at least 15 MHz, but not much faster stuff was used due to real-time nature of the thing), and had RAM of at least 1 megabyte and at least 8 kilobytes of non-volatile RAM. Most of the things (data decoding and display) was done on special chips and very little was actually done on processor.
The operating system was a modified version of OS-9, called CD-RTOS (even the command line was accessible through serial port in some models!) - and the discs were not in ISO 9660, they used OS-9 filesystem. The players read ISO 9660 for compatibility reasons, though.
The native screen size was 384x280 and higher sizes of 768x280 and 768x560 were got with special modes and encodings. The video was supported as 4 video planes (16x16 plane for pointing device cursor, two full-screen image planes and back plane for single color or MPEG full motion video. In addition to normal Red Book CD-Audio, the system also supported ADPCM compression. And, as mentioned, MPEG video (MPEG-1) and audio (MPEG-1 layers I and II) through extensions.
Most CD-i players were sold for educational purposes, as some sort of replacement for "multimedia PC". Of course, a lot of games were produced for CD-i, but for some obscure reason (read: "showing certain level of quality"), they never got too popular. The whole player thing along with its competitors (3DO, Commodore CDTV, Sega CD, etc) didn't fly too well - PCs owned the market in the end.
Personally, I remember one TV game show in Finland that used CD-i systems exclusively, and shamelessly advertised them... should be noded later, I think.
While it is an open standard CD-i is (unlike VideoCD) unlikely to catch any larger attention in future either, due to the fact that CD-i is very hard to emulate efficiently on PC, and new hardware (such as DVD players) does not support it (DVD controls may be less programmable, but at least it's emulatable, and relatively easy to implement with custom software - no need for silly RTOSes!).
CD-i players supported VideoCD through the MPEG module, and officially VCD discs have to have the CD-i VCD playing application on them to be fully standards compliant (but most people who do home burning of VCDs these days couldn't care less, and I can't blame them).
(Sources: New International CD-i Association FAQ http://www.icdia.org/faq/index.html )