I'd try windows movie maker, or windows media encoder, just import your full resolution avi edit and export for web' from there,
You'll be wanting a bit-rate of about 400kb/s for the file-size you want, but you can easily set the target size in the software.
Your quality will be affected by the amount of movement and detail in your edit too, so a simple cartoon could be a minute of brilliant quality at a low bit-rate and therefore low file size, but a full motion video edit of fast moving subjects might look terrible at the same bitrate.
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