Lower resolution and lower compression is better in my opinion, with regard to the two you mentioned. With high comp/resol. you get major artifacts (like low resolution jpeg images, big ugly blocks).  A good midpoint for watching on TV is maybe around 120:1, which leaves some artifacts but these are hardly noticeable on standard TV.  I always go a bit lower to around 95:1 for my movies since it rids of most artifacts and is still a decent resolution, usually around 525xwhatever

again, always depends on the movie. how grainy, how dark, and how much motion makes huge differences.