http://www.radgametools.com/bnkdown.htm
Added to start menu under Bink and Smacker, lots of options (to ignore
).
You can either create the avi from the original jpgs (use force framerate if required) or convert avi to avi.
Just use convert a file to and select compressor of choice when prompted - DIVX should give good compression maybe 50% without too much loss of quality.