I have a 5 minute avi video that's 3 GB in size. What's the best method to encode my video? What free software should I use?
I'm using Windows XP and the current format is .avi.
Both are open source, free and run everywhere (Linux, Windows, MacOS, BSD*)
They are command line tools, and hence can be a little complex, but they will let you specify exactly what you want. If you Google though there are plenty of GUI front ends for both tools for whatever operating system you are using.
SUPER is a good front-end for FFMpeg, which will convert the video.