I prefer to use quality based encoding. I don't want to waste my time burning DVD or Blu-Ray discs. Video files can be stored on a hard drive and played not only on your computer, but also on your TV. You can use network media players WD TV Live to play videos from your network.

I prefer to compress videos with x264 (MPEG-4 AVC) or xvid (MPEG-4 ASP) video codecs. Although I recommend the CRF for encoding, you can use a 2-3 path encoding method to get a particular file size.

You can encode videos with command line or use lots of GUI applications that work with x264 and xvid.