Need HELP, Whats best iPod Conversion settings???

Well I have converted some files FLV and others to MP4 and the output file is bigger then the input file. I tried changing the settings to the same ones I use for psp but it is only double the size but it still is quite big. When I play the AVI file on windows it plays on size of ipod video screen and looks good quality, but when I convert it is bigger size and look the same graphix. What is the settings I should put to have the same file size the same but the graphix still good

I have:
iPod Video (30gb)
SUPER (C) (I got the tip from the guide of the bird guy sorry forget name)

Here is a pic of my changed settings which double size;

 

Just tested the video and it was vut off on the sides like it was wider but still good quality

 

Ok just reealised the video is suppose to be back but now thats left is my main prob the conversion settings, PLEASE HELP guys..

 

video size:320x240
framerate: 29.97 or 25
aspect: 4:3 (widescreen: 16:9)
Other: use the default value

 

How bout the bitrate and how do I transfer one of my videos from ipod back to pc as it is not letting me...