If you use "streaming" technology then the video starts playing before it is fully downloaded, but that usually requires having a streaming server (special software on the web server). Quicktime can do that, Real does that, and some others do too. But they require server software to do it. In general the limits are what you saw. Fast, small files are grainy. Better quality is slower. Better codecs do help. Software like Cleaner 5 can convert between different formats and codecs, and improve the quality and the speed of download.