I've been using the H264 technology to compress MPEG2 recordings from my Twinhan Freeview PCI TV cards to store on CDs or DVDs. See:
using this freeware:
This compresses a 1.10GB MPEG2 file to around 180MB with no loss of quality...:-)
The compression takes remarkably little time to accomplish.
If you friends use QuickTime7 they will already have the H264 codec.