Encoder Options for AVI Files
You can select a wide range of possible compression codecs for the video here. These control how the video is saved and heavily affect the size of the output video and also the quality of the output. There are many codecs that come pre-installed in Windows and many more that can be separately installed (DIXV for instance).
Each compression codec can have internal setting that can affect size and quality of output. These are accessed by pressing the button 'Video Compression Settings'. The individual settings are highly variable and depend on the particular codec. In general many codec have a setting 'bitrate' or 'quality' and generally the higher you select the larger the file size of the outout video and the better the appearance of the video.
You can select a wide range of possible compression codecs for the audio/sound here. These control how the audio is saved and affect the size of the output avi and also the quality of the sound.
The list above for video codec under Windows also lists the pre-installed audio codes.
This setting controls the quality and size of the output sound. The higher listed bitrate (kbps) the better the sound quality, within certain limits. Often above some values you will not notice any improvement and this is also limited by the source audio stream. Similarly you can set the sampling rate and any videos are encoded at 44100Hz or 48000Hz. There is generally no advantage in increasing this value above the source but you will get some size saving by decreasing it. Please note there is a definite quality loss by decreasing the sampling rate. It also lists the number of audio channels. Most audio streams have two channels (ie stereo) but you can cut this back to one (mono) to save additional space.