For the impatient: use MPEG4, 25fps, auto key frames and restrict to 1248 kbits/sec at 480x270 letterbox. Audio is AAC codec, Mono, 44.1, and a target bitrate of 64k.
A 3:30 video renders to about 33MB.
First choose 'Export using Quicktime' from the menu
Then you will see a dialog like this. Choose options
After that you should see the setting for the video formatting and audio. Choose the top 'Settings' button.
Now you will get a dialog for the video format. Use MPEG4, 25fps, auto key frames and restrict to 1248 kbits/sec. Now close this dialog, and hit the 'size' button.
Choose a custom size, and enter 480x270, preserve aspect using letterbox, and deinterlace. Close this dialog, and choose the sound settings button.
Use an AAC codec, Mono, 44.1, and a target bitrate of 64k. Close this dialog.
Now give your video a name, and hit save
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