I use the program Mydvd 3.5 and it only gives me 3 options Good 352x240 res at 2megs/sec Better 352x480 res at 4megs/sec best 720x480 res at 8megs/sec I just found out that the different settings drop resolution,I thought it just dropped bitrate. Then I found this on the website Resolution and bitrate are device dependant. But in generally, for full resolution video (720x480 NTSC or [720x576 PAL]) quality drops of dramatically below 3 Mbps. It is better to drop resolution at this point. We could go to half D1 (352x480 [576]) but player compatibility for this resolution has been know to be not as reliable. So we drop to 352x240 [288]. So I have done all of my home videos in better which is 352 x 480 . Am I going to have a problem playing them because of the resolution?
If you want to go below 3mb/s and in full resolution, than do a two pass encode. I recommend you use TMPGEnc and set it to high quality.