So, I've been editing footage from my XHA1 on Adobe Premiere Elements 3.0.
Here's the problem.
A 1 min 30 sec clip, compressed to h.264, comes out to 450+ mbs!!!
Now, I don't know if that's normal, but it's very high for me.

The solution:

Step 1:
Open the 720p or 1080i video with Quicktime Pro
http://i95.photobucket.com/albums/l152/kevinsaw/compression1.jpg

Step 2:
File>Export
http://i95.photobucket.com/albums/l152/kevinsaw/compression2.jpg

Step 3:
Change export setting to Movie to QuickTime Movie
and Click Options
http://i95.photobucket.com/albums/l152/kevinsaw/compression3.jpg

Step 4:
Click Video settings
http://i95.photobucket.com/albums/l152/kevinsaw/compression4.jpg

Step 5:
Set the Compression Type to H.264
Set you Quality to Medium or High
Set "Optimized for:" to "Download"
Click OK
http://i95.photobucket.com/albums/l152/kevinsaw/compression5.jpg

Step 6:
Go to Sound Settings
http://i95.photobucket.com/albums/l152/kevinsaw/compression6.jpg

Step 7:
Format to AAC
Click OK
http://i95.photobucket.com/albums/l152/kevinsaw/compression7.jpg

Step 8:
Press Ok and start the export
http://i95.photobucket.com/albums/l152/kevinsaw/compression8.jpg

Comparison:

Size
http://i95.photobucket.com/albums/l152/kevinsaw/compression9.jpg

Quality
http://i95.photobucket.com/albums/l152/kevinsaw/compression10.jpg

Hope this helps!

All of these settings are available in adobe media encoder.....

In this step: http://i95.photobucket.com/albums/l152/kevinsaw/compression5.jpg

You leave the data rate set to automatic. I'm not high on that idea since I don't know what any transcoder will do with that. You're better off specifying both the data rate and whether you want constant or variable bit rate.

You might be able to tweak other settings to get the size where you want it, but bit rate is always the key parameter.