AutoGordianKnot (AGK) is a good freeware compression tool - it gives you the choice of compressing to standard sizes, by percentage quality or custom size in MB, allows you to use DivX or Xvid compression and allows you to set audio compression rates as well - all for free! Make sure you download and install the plugins with it.
I use Adobe Premiere Elements to edit video then export at a fairly high quality setting and then for use on the net I compress with AGK - can bring file sizes down dramatically and still keep good quality. I often use the percentage method and find 60% to be good for keeping quality and achieving much lower file sizes.
available at -
http://www.autogk.me.uk/