When recording AVI files you are actually using a CODEC to do the work of storing the picture information within the AVI file. There are loads of CODECS that work with the AVI file format, some are much better than others! Microsoft's own format isn't actually particularly good - unless you are creating clips at low resolution! I personally use either XVID or HUFFYUV: http://www.dvdrhelp.com/tools?section=6#6 XVID gives good compression without losing too much quality, and HUFFYUV loses no quality (but doesn't compress as much). With your computer you should get very good results by using the XVID codec - and it's free!