hi there … this could be a better question for the Compression Techniques forum ….. i normally use another piece of software for doing this … like Sorenson Squeeze, or Compressor ….
i usually go 512×288 … this is still pretty big and you could even go smaller ….
then choose a codec… h.264 is great but needs qt7…. qt MPEG4 is good and only needs qt6 …sorenson3 is another good qt codec…. wmv9 is good for windows people without quicktime …flash is good now too..
there is always going to be a loss in quality, size and compatibility… you just need to compromise and pick a happy medium that will suit most of your viewers….
maybe do some tests and find a setting you are most happy with… then if you have some more questions you should try the Compression Techniques forum…. good luck