Hi Will,
There is unfortunately no single encoding formula that is suitable to everyone. What I would suggest is to choose "H.264" as the Format and then pick a Preset from the list and do a short encode and then check the result for both file size and quality. One minute is a good sample time, since you can then just multiply file size by minutes to know roughly how big a clip would be. There are a TON of presets under H.264, for instance various iPod and iPad settings, one of which you might find suitable to your needs. Make sure the frame rate matches, and 4:3 or 16:9 dimensions also. If you find a preset you like but want to further reduce file size, you can try lowering the bitrate and find the threshold of size/quality that you like.
Thanks
Jeff Pulera
Safe Harbor Computers