Figure 1: Windows Live Movie Maker "Save Movie" presets selection.
When using various video authoring tools you need to specify the desired resolution, bit rate and audio sampling frequency. Most of the tools offer ready to use presets which allow to create video files suitable for a given purpose (see Figure 1).
Bit rate is directly associated with the quality of the presented material; the better the quality (the more details a movie has), the more space it occupies on the hard disk. Figure 2 presents how file sizes depend on video resolution and used bit rate [source].
Apart from bandwidth capacity there is also one more requirement which you should take into consideration: computational capacity of end-user devices. As desktop computers do not have any problems with decoding high quality video, you should remember about other devices like netbooks or mobile handsets. Their computational power is very limited, so to ensure that your content will be accessible for users you should consider publishing a dedicated version of videos.
As this short introduction does not exhaust all tips and tricks associated with digital video, you may wish to refer to a great advice document published by JISC Media Blog : "Introduction to digital video".