Reducing video size and conversion

I started to transfer most of my videos (8mm/Hi8) to pc using firewire and Windows Movie Maker that came with Win XP Pro.

The setting is Others -> Video for Broadband NTSC (768 kbps). I've tried High Quality and 384 kbps but the quality wasn't that great.
I want to keep the 768 kbps setting but a 22:30 second video equals to 109 MB and 48:25 second video clip equals 242MB!!

The video clips are .WMV format.

What are the options (any options will do )that will maintain equal video quality but reduce MB size?
I have ULead Videostudio 5.0 and my friend has Adobe Premier 6.0 if those programs are better for such project.

Try windows media encoder 9, its a free download from microsoft's website and offers a convert file option to help reduce size and optimize the videos.