if you want to keep it as an avi, use virtualdub. If you want to make it mpeg1/2 (for (s)vcd or dvd, choose an mpeg encoder.
2.5mins of good quality avi should end up about 25MB.
Lower resolution vcd will be about the same.
SVCD you're looking at 50MB.
DVD, probably about 100MB.
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