You didn't mention what compressor you are using. The divX codec (compressor/decompressor) available at www.divx.com, usually makes good quality image .avi files. QuickTime (the free version is available at www.apple.com) using the Sorenson 3 compressor also does a good job. Both require the end viewer to download something but both formats are already in fairly broad circulation - especially among those who are into movies and animation (your peers). Many of us render the stills at the highest quality we can - uncompressed if HD space permits - so we have one perfect copy of the animation. Then we compress the animation into a movie file using another program. I sometimes try different settings and compress just a short bit of the animation just to test/evaluate the compression. I do it because compression uses mathematical formulas that interpret the changes of data in the image. When there are a lot of changing pixels (like in a rapid pan or blurring in and out) sometimes the compression needs to be adapted to accomodate it. BTW, rodzilla was absolutely correct. High compression (smaller file size) makes the image quality poor. Low compression (larger file size) makes the image better. It's a pain in the butt and you end up having to decide for yourself which combination of size and image quality you're willing to live with. In order to cheat, sometimes you can reduce the frame rate (for example 15 frames per second instead of 30) or make the movie dimensions smaller (for example 320x240 instead of 480x360) to reduce the amount of information in the movie that has to be compressed.

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