no prob.. ^_^
here is an easy guide for converting it to xvid once you get it in vdub..
http://www.animemusicvideos.org/guides/avtech/xvid.html
and for audio compression use lame mp3 compression. You can get it in the amvapp. amvapp installs a lot of stuff but you can choose witch programs/codecs you want installed from it. Make sure to get AMVappAudioApps from inside the amvapp that has lame in it.
To use lame in virtualdub.. up in the menu located on top of the window.. you know where it says "file, edit, view etc.." there will be one called Audio. open that and scroll down where it says full processing mode and select it. then click on the audio menu again and now select "compression". Here you'll see a lame option. Select that then select a bit rate like 192kbps or 128 kbps then press ok. Now all the audio is set for when you go to "save as avi.." in the file menu. the video compression is easy to figure out so I don't think I'll go over that.
To use lame in virtualdubmod in the top menu in the vdubmod window choose "Streams" then select "Stream list" it should show 1 available stream.. right click on that then select "full processing mode" then right click on that same item again and go to the "compression options" select lame then choose how fast you want the bitrate to be then press ok then in the "available streams" window press ok again.. then you'll be back in the main window of virtualdubmod. That will be all for setting the audio and when you're all done setting the video compression go to "file" select "save as.." and the rest should be easy to figure out.
Hope that helps.
