Converting AVI Movie Captured by VMware Workstation

VMware has a nice option to record your OS guest usage to AVI file. However, in order to playback this AVI one most have VMware Movie Decoder installed.

I wanted to convert this to more common format so that receiving party does not have to install the mentioned encoder. I was happy to find on instructions for Linux for converting to Microsoft AVI and then to FLV:

mencoder -of avi -ovc lavc movie.avi -o movie2.avi

Converted AVI was about 40%smaller in size with acceptable degradation of image quality. Zip shrink additional 40% on file size. Nice.

P.S.I also tried converting AVI to FLV:

ffmpeg -i movie2.avi -r 12  -b 100 movie.flv

but produced FLV was even larger than original AVI and had tremendous degradation of image quality.