Okay I am converting my various DVR-MS and WTV files to mp4 using MCE Buddy. Since these are archived for playback using XMBC and not Windows Media Center which I will continue to use as a DVR, file type, fast-foward/rewind are less of an issue.

I want to get the preset right. So far with the files I have picked out for experimentation, turn a 1.5GB+ file into a 390-400MB file (great!), but I see the resolution is off because I get the (noise) at the top of the picture.

Questions:

Can I get the correct resolution (640x480) for a file I converted using Windows Live Movie Maker, instead of the 704x480 which creates the "noise" at the top of the screen?

That isn't really a question, as I know things like resolution can be changed with the GUI. But just wanted to make sure

The other questions are:

How small can I make these? I'm confounded WMC makes these files so huge and don't even use WMA which is only 100MB larger than another file from the same show converted to H.264 (400MB). Since I started using XBMC (Media Browser before that), I have given up trying to play these back inside WMC and keeping the Metadata. So to have even more space on my 2TB drive, I wanna know how much smaller I can make this and MAYBE retire my external drives on my HTPC, since the majority of the files on there are SD and in WTV (or DVR-MS).

Is One Pass enough or should I do 2 Passes on SD files?