First, make sure you've got the latest DivX codec. Download it from
(make sure you do NOT get the Free DivX 5 Pro codec, it comes with spy ware) and install it.
To make really small files it would probably be a good idea to pick up the latest MP3 encoder too (otherwise your audio will be uncompressed and it'll end up being bigger than your video). I can't recall the best place to get the audio codec, search for it.
When you've got your video on the timeline ready to export:
1. Select File->Export Timeline->Movie...
2. In the dialog click the button marked "Settings..."
3. In the drop down marked "File Type", select "Microsoft AVI" and click Next
4. In the drop down marked "Compressor", select the divx codec you want to use (there should only be one if you're using DivX 5).
5. Set the frame size & frame rate to something appropriate and then click the "Configure" button
6. Set the bitrate to something appropriate. A bitrate setting of 1000 should allow you to fit a 2 hour movie onto a CD (big number = big file + good quality, small number = small file + poor quality). Click OK and then click Next.
7. Select an appropriate encoder (I think the Lame MP3 codec is the best but I have lots of drive space and I usually export to DVD so I rarely bother with DivX).
8. Click OK and then you're ready to export.
Hope this helps