Following are the settings I use for the reduced size clip that I want to produce.
Name: Untitled
Description: QuickTime H.264 1280×720 video with AAC audio at 41 kHz. Settings based off the source resolution and frame-rate.
File Extension: mov
Estimated file size: unknown
Time remapping:output duration 100.021492%
Audio Encoder
AAC, Stereo (L R), 44.100 kHz
Video Encoder
Format: QT
Width: 1280
Height: 720
Pixel aspect ratio: Square
Crop: None
Padding: None
Frame rate: 25
Frame Controls On:
Retiming: (Fast) Nearest Frame
Resize Filter: Linear Filter
Deinterlace Filter: Fast (Line Averaging)
Adaptive Details: On
Antialias: 0
Detail Level: 0
Field Output: Same as Source
Codec Type: H.264
Multi-pass: Off, frame reorder: On
Pixel depth: 24
Spatial quality: 75
Min. Spatial quality: 25
Temporal quality: 50
Min. temporal quality: 25