@tadad1:
I am using ancient (and free) tools such as DVD2AVI to make extremely good DVD rips into 700 MB AVI. I use Xvid 2-pass encode, which takes longer but is more than worth the wait.
I'm amazed that you're using VirtualDub like this, so much is unnecessary when the target is such a tiny screen. I make Xvid movies for my Pocket PC that are typically 70-75 MB for 2-hour movie. The picture is no good on a big screen, but quite watchable on the tiny one. And the PPC has a much bigger screen than those on our Chipods.
I would never encourage anyone to make uncompressed AVIs, it just makes no sense. There are many low-loss codecs you can use.
Also, in your example, the aspect of the output picture looks wrong, and I seriously doubt the wisdom of using so many filters. Especially the sharpen one, which is going to have the main effect of increasing noise. This just makes more work for the final encoder, and also increases the filesize. You don't need sharpening for such a tiny screen; you would never see the difference.
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