These answers don't satisfy MY needs. My mobile supports .3gp and .avi formats
3gp files are always smaller in size but with least quality (especially audio part)
Avi (certainly) exhibits better quality but the video converter I am using (namely Xillisoft VidConverter) outputs avi file with very high size, which isn't suitable for portable devices
So I'm looking for (essentially free or open source) software that creates smaller files with a better quality than 3gp!