Optimal export from Canon Vixia HV30 via Final Cut Express for Blip.tv

I am looking to optimize the export of my videos from Final Cut Express (4.0.1). I shoot HD Widescreen on a Canon Vixia HV30. I've been having problems getting good quality in a smallish package.
For some reason, the videos come off the camera at the odd ratio of 496 x 279. This means I have to export them that size, but the final product ends up being huge. Literally, the screen is larger than the computer screen, and I have to view it on half size. I feel I could get more bang for my buck if these videos could be exported smaller initially.
Here are my settings for export (as Quicktime Movie with Quicktime conversion):
Compression: H.264
Quality: High
Key frame rate: 24
Encoding: Multi-pass
The only tweak I make is to set the kbits/sec to between 3000 and 3500, which gets me a decent looking video that's about two minutes long and between 40 and 70MB.
If I try to tweak the ratio or the format, the picture gets squeezed or the quality drops significantly. I've also been running into the problem of skipping playback on Blip.tv, which recently switched to a new version of Flash.
Any help on how to shrink the video and keep the quality?
Regards,
Philip

Export to where? Where are you trying to get to? Export QuickTime Movie is the original converted FCE media file.

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