I have this 356MB .rmvb file that I converted to .avi and it became 2Gb. But the size is still the same, and the quality still sucks. Is there any tool that could increase the resolution and quality of this video so that it would fit with my monitor.
What you're wanting is getting information from nowhere - CSI style "increase... increase... enhance.. zoom in on that guy's watch... enhance... we have our killer, and look at that letter he's carrying! That's his home address, let's go!" is entirely impossible.
It may be possible to slightly increase the quality, but nowhere near what you want. Sorry, but if you want better quality footage, you can't get it from low quality footage.