Windows Media Encoder is a free encoder that allows you to convert video. It can also capture and stream live video. A number of audio and video codecs are supported. It also supports two-pass encoding and VBR to improve the quality.
The installation file is 9.5MB and available for download from Microsoft. Installation takes just a minute or two and the program is quite simple to use.
Just choose the file to encode, choose output location. Next select how you would like the to distribute your content. Finally choose the encoding settings of your choice. (You can choose different options and see the output size and bitrate) Remember the lower the bitrate, smaller the file and lesser clarity and vice versa for high bitrate.
If you would like a portable encoder check out our VirtualDub Guide.