What would be the best format to choose when converting a DVD to play on an Asus EEEPC?

It will play MP4's which seem (relatively) small - around 350meg - but if i select the Standalone MPEG4 player in FairUse 2.8 i seem to end up with an AVI file.

Although this plays fine the file size is much bigger.

Any advice for a newb would be welcome.

Cheers