Encoding guide for customizing mpeg-1 clips for the web?

[duckboy2k]

Does anyone knows of any good guide for encoding mpeg-1 clips for the web? Clips range from 20-30 seconds, file size has to be under 1.3-1.5MB, while keeping the video sharp. Audio, will probably be around 64kbits cbr or 92kbits. Video resolution is going to be 352x240 or 320x240. Delivering method will be progressive download.
I will be converting from MPEG-1 files and AVI.
I tested a few encodes with Sony Vegas and was quite dissapointed with the result, it only has a few settings for customizing mpeg-1.

I know TMPGenc is very popular in this forum, but I will need to watermark my videos which TMPGenc does not support. A workaround would be to use virtualdub to watermark the video then convert with TMPGenc, but I'm afraid converting it from an already lossless compression to another then back, will only degrade the quality even more?

I already spent a good portion of the day googling for some guides relating to streaming mpeg-1 with no luck, it seem WMV is the format of choice these days.

[whitejremiah]

if your only dealing with 20-30 second clips, im sure you can probably afford a little temp space on your harddrive.....take the video, load it up in virtualdub, add in your watermarking as needed, and save either completely uncompressed, or using a lossless compression........lagorith, or huffyuv, for example......take THAT output (which is bit for bit identical, except the watermark that was added) and load it into tmpgenc or whatever other program you decide to go with........as for streaming video, divx recently introduced a browser type deal that plays the video in the browser itself....check out labs.divx.com for a bit more info on that, otherwise wmv or (gulp) rm are probably the most promenent streaming video solutions at the moment......mpeg-1 is probably the most universally compatable, but honestly, it's not the best idea to go with unless you ABSOLUTELY must have the video accessable to EVERYONE.....mpeg 1 is unfortunately very unefficiant for streaming...wmv can deliver the same video quality at a fraction of the filesize.......as for RM, it's primarily used for when people just wanna make a file as small as physically possible...but the end result ends up looking like garbage normally....divx is good compression wise, and should be able to deliver the content at even lower levels than wmv even, the only downside is the streaming thing is very new to divx, so it may yet have a few bugs to be worked out of it....that and if it's going to be used for a commercial website, i think they have a thing on that site that says specifically that it's not to be used commercially, so you may have to get ahold of them for that type of thing, if it's just gonna be used on a free website, though, you can definately use it.....all kinda depends on what your intentions are, and how important universal compatability is..........but as long as your website visitors are running windows, you can use any of the above options, since most people have these codecs installed on their pc anyhow.....