I love this encoding explanation I saw a few minutes ago on www.KickStarter.com. A great site, by the way.
What's the ideal video encoding?
On Windows, use WMV format. On Mac, use H.264. In both cases, the key variable is the “bit rate,” so look for that box. If it’s measured in kilobits per second (kbps), try 1500 to start. If it’s measured in megabits per second (Mbps), try 1.5. If the file is too big: Make that number smaller. If the quality seems bad: Make it bigger.