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Sometimes, Mencoder is too complicated for such a simple task due to its flexible options. FFmpeg is much more simpler and straightforward for that task. For example, you have a music video in MPEG but it seems too big. However, you don't want to drop audio quality too much.

My trick is to specify audio codec and audio bitrate to mp3 and 128 kb/s respectively.

ffmpeg -i input.mpg -acodec mp3 -ab 128 output.avi

Tags: mencoder, ffmpeg