Depends what you mean by 'too much'.
Using .wmv 500 kbit will give you acceptable quality (to me) at 320 x 240.
1 mbit maens you can use 640 x 480 on some not too frantic video, with lots of fast action stick with 320 x 240.
2 mbit and you can go for dvd res and the results are dvd quality.
Lower bit rates will be acceptable in smaller windows.
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