I've been working on this kind of things for the last two weeks while setting up a streaming video server. For simple compression, the easiest thing to use is Windows Media Encoder which you can download from microsoft. Video encoding is the one thing other than games that makes people buy the latest-and-greatest processor, and it's the one thing the P4's impossibly-long pipeline works well on. If you're only doing the occasional family video, speed probably isn't too important however.

Matthew