My suggestion would be to use that one. It's available for Windows, OS X and Linux as well. It's free, open-source, supports threading and relies on the popular ffmpeg video codec library.
You can of course adjust the size of the output video, but if you're lazy you can probably also use one of its built-in presets. There are probably some for 320x240 since it's a standardized video resolution typically found in mobile devices.
If you go manual, your main settings will be:
- Video - Video codec: MPEG-4 (ffmpeg)
- Video - Framerate: Same as source
- Picture Settings - Size (see picture below, something like this)
Note that the window could look different for Windows. You can also check the result with a preview window to make sure that there is no distortion.
This is a free Windows only tool that also wraps the ffmpeg codec library into a GUI. It therefore has the same features, but I find the interface rather ugly and the workflow is not as polished.
The settings should roughly be the same. For the output codec, choose MPEG-4. Under Video Scale Size, choose 320x240.
Here at the bottom of the page is the download link, just for convenience because it's really really hard to find on the website and direct links don't work.