Need a solution for space constraints

[CTARJEFT]

I am trying to convert an archive of 80+ hours of old 8mm videos and am using Ulead Videostudio and Ulead Dvd movie Factory 2 to create my dvds.. The problem I have is when I rip a video through my capture card a 2 hour non-compressed video is roughly 38GB of data. I tried several codacs all of which seemed to decrease the video to a lousy quality.. My question is are there any formats/codacs where it will convert 2 hours to 5GB or under that are of full TV viewing quality, the way I see it is there has to be something because a 2 hour VOB file is only 4.7gb and they look great. Any suggestions would be appreciated.. Right now I have to put the full movie in DVD and then convert it back to mpeg if I want to take a part which takes roughly 5 hours.

[CTARJEFT]

Oh ya, the codac would have to make the file an avi, or mpeg1/2 those are the formats that I can work with in ulead videostudio.. That was my main concern.. I want to be able to take video segments and put them into one in ulead videostudio without having to re-capture every time..

So basically I need a way to have at least 20 hours of video in 50GB of space and have the ability to take parts of that video to make a new video.. YOu know when you record family events you have 30 seconds of funny stuff and 10 minutes of boring stuff.. I want to take teh fun stuff and put music in the background and have effects.. etc.. and need a way to easily access the entire library without having to re-rip each time I need a segment of video.