Convert PVMJPG to DivX5 ?

1) MJPEG has nothing to do with MPEG1. 2) You can convert the MJPEG-AVI as any other one, using VirtualDub. You open the file, setup the compression and the wanted bitrate, and then save to a new AVI, nothing simpler than that. If you're wondering how to find the right bitrate to fit into 700MB, use one of the calculators available on the download page of Doom9.

Answer :) 

Well, it was easier then I thought. All I had to do was try it! Just opened Virtual-dub. Choose the divX5.02 codec+full process for video Choose direct copy avi-audio. ...and 1 hr later... VOILA, 5gigs down to 600megs. Didn't have to do a thing !!! Love these conversion progy's... Pitty the area around moving objects is a bit 'blurry' now. But I'll try fidling around with some filters, see if i can improve image-quality, boost-up the collors a bit and maybe speed up the conversion-time by reducing output-size.