if you need to do mpeg-2, and you should only be doing it for svcd or dvd, as mentioned above, then remember to do a 2-pass (or more if possible) vbr encode, and use all the available space on your end medium, for optimum bitrates.
also, what bitrate/format are you outputting the audio as with your final mpeg2? if you're using uncompressed pcm, that'll be the reason the files are so big. mpeg2 will be bigger than anything else anyway, but not bigger AND worse quality.
AMD Athlon 1700 (@2200mhz from 1466 sod the noise!) - 768mb pc3200 - 200GB Maxtor - Pioneer 106 - GF4 Ti4200 - twinhan/visionplus pci dvb-t - random pci analogue tv tuner - A7v600-x (to replace the a7n8x-d that died...) - random 17\" CRT
Sony STR-DE425 & Eltax c205s;
xBox w/20GB HDD- executer 2.3b;
xBox - standard;
Konica/Minolta dimage z10 w/2x512mb SD;
A silly amount of Cat-5 and usb cables