I assume its a .avi file,
The way I know is to use virtualdubmod. You can get it here
http://sourceforge.net/projects/virtualdubmod/ .
You may also need the divx codec. You can get it here
www.divx.com .
open the avi file in virtualdubmod, goto video compression, choose divX Codec on the left, click configure,
Now change the bitrate, the more passes the better quality and slower it is. There is a calculator button on the right which you can use to calculate the bitrate you need for your size.
That is the straight forward way.
I can't really say I am a gun with this program, there are alot of creative ways you can reduce the size eg reduce sound quality only
reagrds
Eric