.Avi .Mpeg And Compression

This follows on from the screen capturing question using Camtasia/Snag it.

The output is in .Avi, and its very large in file size. 50 seconds is around 45M/B uncompressed, and thats of a 300x300ish screen.

I am not sure of the best way to compress it and keep good quality, and I am wondering if .mpeg format tends to be smaller - and if so to what extent.

Any information on this, or if anybody knows of a program that can help me compress .avi files and keep them good quality would be very usefull.

I’m also interested in what compression people use when recording from windows media when using Snag it / Camtasia.