save MPEG which is way too big

Except MPEG 4. The good news is that many companies are going towards MPEG 4 as a standard, including Quicktime. Quicktime 6 is actually just MPEG 4, as is Divx and Xvid and such.

Of course MS is going the opposite direction.

And the .avi file format has always been a mess, but at least it has always been consistant under Windows by having codecs available to install to allow anything to play the format.