Hi everyone!
I'm relatively new to video editing, so let it not surprise you if I don't understand some basics.

Anyway, I got an HTC Desire HD phone recently, and it is able to shoot in 720p and, given the fact that it has only a basic lens and a 8 MPix camera, it gave good results.
I completely understand that it can't replace a real video camera, but at least now I have something to shoot videos at all times, even if I've brought nothing but my cell phone

Now, I'm not interested in just uploading unedited 3GP's. I want to use this videos in my Sony Vegas 6 projects (yes, Vegas SIX).
And that's where things get messy, because the quality keeps worsening.

The source 3GP file has the following properties:
Attributes: 1280x720x24
Format: H.264
Frame rate: 20.000
Field order: None (progressive scan)
Pixel aspect ratio: 1.0000 (Square)
It is 46 seconds long and the file is ~43 MB.

So am I right that it's basically the MPEG-2 H.264 format? What destination format should I choose to preserve good quality and relatively normal size?

I tried rendering as MPEG-2 and ended up with a 24 MB file (even though I chose best quality, it's twice smaller than the original 3GP). Crappy quality, almost webcam-worthy.
YouTube didn't even recognize it was 1280*720 (though it was!) and only allowed 360p and 480p, neither of which looked good.

Then I rendered it as an AVI file with the H.263 codec (don't have H.264 for some reason), best quality. Resulted in a whopping 1 GB file. Quality was good, but 1 GB? Really?

The original file was 43 megabytes. I sense there must be a destination format with the same quality and reasonable bit rate?
After all, if I understand this correctly, 3GP is MPEG-2. It is already encoded with H.264. How do I preserve it?

Thanks in advance for any help!