HTML5 is the newer version of HTML that is enriched with new features like audio tags, video tags, canvas, geolocation, and application cache to enable richer user interactions and gaming. It supports cross-platform compatibility without plugins, has improved security compared to Flash, and allows animations and effects through CSS3 that are faster than jQuery. HTML5 should be used if a site needs over 80% browser support, security is not a major concern, source files can be shared publicly, and mobile compatibility is desired.