What compression to use when capturing?

Hi, I have DigiVOX A/D. I want to capture some TV programs. But I'm littel confused which compression (codec) to use and how to configure it.
If I select DVD PAL 4000 kb/s in settings, 10 secconds of video is an 5.4 MB mpeg file.
If I select AVI 2000 kb/s in settings, 10 secconds of video is an 159 MB avi file.
And the same size (about 158 MB avi file) is when I select MPEG4 2000 kb/s.
This is somehow strange. Should'n 2000 kb/s produce smaller file than 4000 kb/s?
What settings do you suggest? What codec, what resolution, bitrate and so on? I want it only for later watching so it doesn't have to be superb quality.
And another question is about audio coding. There are only PCM (with different settings) in audio settings. No MP3 or so. Is that OK?

juso, you need to install the full codec pack, you can get from http://www.free-codecs.com/
K-Lite is a good one. Most are decoder (playback) but it also include encoding (record, encode) packs.
Once you have the codec installed on your system, you can choose more than AVI, MP3 etc.
Depends on your CPU, if you have a powerful one, I'd use DivX or XVID or MPEG4 encoding, and mux with MP3.

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