ITunes Movies - File sizes and iPods

I searched to see if I could find an answer, but wasn't successful.
Question relates to if we can down-convert iTunes movie purchases to be more efficient on iPods? A downloaded movie (that plays beautifully on an Apple TV) is often over 1GB in file size. The kids have 8GB iPod Touch's and complain about movies taking up too much space.
Is there a way to reduce the file size for play on their iPods?
Thanks.

Which in my mind is an indicator that DRM is involved. I can select purchased movies and TV Shows and the option is not available - but I choose a home made movie and the option is available.
You are stuck with what you have.
MJ

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