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divx/xvid .avi is the BEST, there's a reason why EVERY movie or TV show I ever download uses .avi. If you're talking about like 1080p content wmv is badass, but for really nice looking "DVD Quality" vids xvid/divx is by far the best. I've been noticing recent version of Divx are stepping things up quite a bit. 1-2 years ago Xvid was considerably better than divx but I think the nod goes back to divx these days especially for fast encoding on quad core CPU's.
Mpeg1? that's a joke unless you plan on burning like straight to DVD its an incredible bandwidth waste.
For the super small files flash is the best for embedding on your sites.
the real question isn't really the rate of your video but more the resolution and length.
Anything small that you plan on streaming avi isn't in the mix anymore and flv is really the best option. Larger things see above
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