Compression
Quality
File Size
MP2 as someone else said is DVD quality (as well as other apps). MP1 is standard, and WMV is a different compression that will generally help in file size.
A lot of how you encode depends on your preference, and how you want to deliver it. One websites I prefer encoding in dvix for decent quality, and smaller file sizes. I used to encode in xvid, but after new computer, there was a problem with my XL Cleaner and couldn't do it anymore.
Any choice really depends on what you are looking to do ultimately.
