Spaz

I have recently bought the iPhone and I did some conversion of MPEG 4 AVI files. I noticedvery poor picture quality on the iPhone using the automatic iPhone pull down option in the video converter menu; However, when selecting just MPEG4, the quality is very good. The only problem is that the compression still isn't the best. The file is still quite large. What are the settings to change the file for the iPhone to a decent quality while taking up the least amount of space eg. 320x240 and what bit rate min and max? Thanks