VirtualDub (free video editing and capturing software) and XviD (mpeg-4 video codec)

VirtualDub is a freeware video capture/processing utility for Windows. It isn't as powerful as a non-linear video editor such as Adobe Premiere, but is streamlined for fast linear operations over video--and well, it's free! It has batch-processing capabilities for processing large numbers of files and can be extended with third-party video filters. VirtualDub is mainly geared toward processing AVI files, although it can read (not write) MPEG-1 (but check out VirtualDubMod below) and also handle sets of BMP images.

If you have a digital camera that can make AVI format movies, VirtualDub can allow you to enhance them with its filters such as making them brighter with the levels filter and much more. You can also delete unwanted frames from the video easily with VirtualDub.

I highly recommand that you get the XviD codec. XviD is an open-source ISO MPEG-4 compliant video codec, designed to compress/decompress digital video. To use XviD with VirtualDub click "Video->Compression" and choose "XviD MPEG-4 Codec" from the list where it says "Select video compression". Make sure you do this before you save your edits with "File->Save as AVI". When you save with the XviD codec your AVI file sizes will be much smaller and will still be high quality!

Once you get the hang of VirtualDub you might want to try VirtualDubMod, for more specialized operations. VirtualDubMod is a unification of several popular modifications of the VirtualDub. Unification of three projects, VirtualDubMPeg2 (MPEG-2 support for SVCD, DVD, VOB, AC3, OGG Vorbis, VBR MP3 and experimental ASF/WMV parsing), VirtualDubOGM, VirtualDubAVS and more (such as Matroska support, multiple (>2) audio stream support for all output formats, and improved AviSynth integration).

With VirtualDubMod you can do cool things like change framerate and match video and audio durations if your sound is out of sync with the video. You can also multiplex AC3 audio into XviD or DivX movies. Read the FAQ for more info.

If you want a Smart Bitrate Control (SBC) method of encoding DivX (DivX3.11a) check out nandub for more specialized AVI editing--but read this first.

http://www.virtualdub.org/
http://www.xvid.org/
http://sourceforge.net/projects/virtualdubmod
http://ndub.sourceforge.net/