Well MPEG2 is generally grossly inefficient compared to MPEG4 encoding. And that DVD template probably gives it the max bitrate specified in DVD spec, thus unnecessarily bloating it.
If you feel adventurous you can always read up on x264 and figure out how it works (Avisynth + x264 is pretty simple once you get the hang of it) or you can read Jeffro's quide on how to use x264vfw with Virtualdub as it uses a simple gui instead of a command line app.
If you feel adventurous you can always read up on x264 and figure out how it works (Avisynth + x264 is pretty simple once you get the hang of it) or you can read Jeffro's quide on how to use x264vfw with Virtualdub as it uses a simple gui instead of a command line app.