You don't probably understand the technology now, at all.
Video formats (just like audio formats, including MP3) can have various bitrates. And bitrate is the one that determines the size of the file. And video compression technologies can be compared by comparing video clip that has same resolution, same framerate and same bitrate and then by taking a look at the quality of the picture.
If you're speaking of VCD.cfm" class="forum_link" target="_blank">VideoCD format, VCD is one pre-defined MPEG-1 video stream that has 1150kbps (kilobits per second) bitrate and that bitrate can't be changed or the MPEG-1 file is not VCD compliant any more.
Good quality (better than TV broadcast, much better than VHS) can be achieved using DivX with appx. 600-700kbps bitrate or SVCD using 1000-1500kbps bitrate.
Ok, now you ask why anyone would ever use VCD or SVCD if they take more space compared to DivX or other MPEG-4 formats? The whole point -- and the ultimate idea behind our site as well :-) -- is that VCDs and SVCDs can be played with regular, stand-alone, plug-this-cable-to-your-TV-and-go, DVD players. DivX requires computer.
If you want to reduce the size of your AVI (read this to understand that AVI actually doesn't tell you anything about the compression: AVI.cfm" class=korostus target="_blank">http://www.afterdawn.com/glossary/terms/AVI.cfm ), you need to re-encode it again with DivX or other codec using lower bitrate. And quality drops when you re-encode video clips (even if you use the exact same bitrate, produce an exact same size file, the re-encoding always weakens the quality, because _ALL_ of regular video compression methods are "lossy" -- they "lose" "unnecessary" video information and more you encode the clip, more details you lose) and lower the bitrate.
