usually mpeg1 files are smaller then mpeg2 but only because mpeg1 is used for capturing low resolution video. mpeg2 compresses higher quality video to a size comparable to that of mpeg1. you are going to want to go with mpeg2 under most circumstances, and especially if you want good compression and quality at higher resolutions/bit rates. go with mpeg1 if you need super-small file sizes for VCD and streaming video.
