[CentOS] Open Source Video Codec and Container (alternative to Xvid)

Hi CentOS users

I am running a forum with small video clips (from YouTube and others). I convert those Macromedia Flash videos with:

$ mencoder example.flv -ovc xvid -xvidencopts bitrate=1000:autoaspect -vf pp=lb -oac mp3lame -lameopts fast:preset=standard -o example.avi

I use mencoder RPM from Dag Wieers

1) Its very generic command line to convert videos. What would you improve? The size is much bigger than the original FLV :(

2) Is there a real open source format what I should prefer? Can you say something about its quality?

3) Whats the most painless format for exchanging videos with Win, Mac and Linux users?

cheers Simon