How to output an x264 video from AVI and what container? *in short time*

[mriddler]

I know this question might seem repeated, as I already searched "forums", "guides" and "tools"!!
But I really got lost in the topics....

I will make myself clear here, and I will wait for an expert to guide me.
I saw videos posted on the internet, it was ripped from Bluray Disc (BD) into x264 AVI, the quality was much more better than DivX and even smaller (500 MB for 120 minutes)
* I attached a screenshot for the video*
http://i40.tinypic.com/fvx4w.jpg

My case:
Source: AVI video (XviD or DivX)
Target: AVI video (MKV could be acceptable) with x264 (will be played on PC)
Quality vs Size: I want it smaller in size and not to lose much quality
Time: It's all about time, I don't need a tool to convert 100-minutes video in another 100 minutes!
--my PC is 3.4 processor with 1 GB ram, so 30 minutes would be fair--
Tool: One single tool plz, not bunch of them

Some will say: "beggars can't be choosers ", but I really need it that way...

And what if my source was Bluray? But that's another issue which I don't need now. But If a tool can handle both Bluray and XviD (or DivX), I will be more than grateful.

[jagabo]

Converting your AVI to h.264 isn't going to improve the quality at all. Go back to your original BD. You can probably shrink the Divx/Xvid AVI by about 1/3 using h.264 without losing too much quality. I'd use x264 and x264gui to make an MKV file -- assuming your playback device can handle MKV.

[mriddler]

Converting your AVI to h.264 isn't going to improve the quality at all. Go back to your original BD.

I don't want to improve the quality, I just mentioned that x264 vs DivX when ripping from BD just as an example.
As I said:
My source is DivX/XviD AVI

You can probably shrink the Divx/Xvid AVI by about 1/3 using h.264 without losing too much quality.

Using H.264?? It isn't what I asked for, as I thought that x264 is better If H.264 can really shrink size to 1/3, plz tell me how?

I'd use x264 and x264gui to make an MKV file -- assuming your playback device can handle MKV.

Do you mean that tool "Leimings x264 GUI"?

[poisondeathray]

Using H.264?? It isn't what I asked for, as I thought that x264 is better

x264 is a freeware h.264 encoder. h.264 is a format, mpeg4 part10. Just like divx/xvid is a format, mpeg4 part 2

--my PC is 3.4 processor with 1 GB ram, so 30 minutes would be fair--

Can't be done with your PC, expect 3-5hours

You can't shrink the size without quality loss. Re-encoding using a lossy codec only degrades quality. You are using a low quality xvid 2nd generation video as a source, instead of the original blu-ray. If you started with the original blu-ray you could do it with much better quality

I would leave it as is.

[jagabo]

Oh, sorry, x264 creates MP4 files, not MKV.