Compressing digital camera videos

I love making videos on my digital camera. I know it is not ideal, but it is much more convenient because most of the time, I am taking pictures. It is much more easier to change it to the video mode rather than dragging the big camcorder along all the time. Another reason is that it is much easier to transfer the videos from digital camera to the computer.
However, most of digital cameras create huge-sized videos because they do not use compression at all. They use MJPEG format for the video. So, even a 3 minute video could end up using 450 MB of space, which is ridiculous.
So, I need to convert these videos to much smaller sizes while still maintaining the same quality. That means, I need to use compression formats like XviD, DivX, x264, etc.
The tool which I have been using is WinFF (Graphical User Interface for FFMPEG, which is a free/open source video convertor). I have been using it on Linux (Ubuntu), but they have Windows versions as well. It is free and easy to use. I am pretty sure there are other tools out there as well, but I could not find a decent one for Ubuntu.
It is pretty straightforward. You can either use the default options, or specify your own bitrate. For the most home videos (non-HD), a video bitrate of 500 should more than suffice. You might want to experiment a bit to find your right balance, but 500 should server as a good starting point.