The quick issue: I need smaller file sizes.

The long issue: After a series of 10 second tests (with mic and mac audio tracks) with a variety of encoding features, I've come to the "final" formula for the best settings I have yet to discover:
<For 10 second tests>
Record in Snapz ProX 2.1:
-800x600
-10 frame rate
-compess using AIC (apple intermediate codec)
-match frame rate to 10
-use preset "other"
-use IMA 4:1 for audio @ 44.100 mono
-RESULTS IN a 5.4mb file
Recompress in Quicktime Pro:
-Movie to MPEG4
-H.264 format
-700 data rate
-optimized for streaming
-image size custom (800x600)
-frame rate 10
-key frame every 1000
-video options... restrict profile main, best quality (multi pass)
-audio (AAC-LC, 128kbps, mono, 44.100khz, better)
-no settings checked for streaming
-RESULTS IN a 912kb file

You might be saying, shoot, you shrunk the size by nearly 75%! Yes, but I'm looking to create 30 minute educational screencasts for an academic library. At roughly 1MB for 10 sec videos, I would be reaching file sizes of 6mb a minute and 180mb per half an hour before production within iMovie 08.

I know these files, which are not very complex, can be shrunk. I look at Screencastsonline and the Merlin Show seeing their file size and quality and nearly drool - I've got to figure this out...

I'm up for any and all suggestions.
Feel free to e-mail.

In my experience, H.264 gives the highest quality for the file size. I think the biggest hog is your screen resolution of 800x600. Could you do the screencast at 640x480? If not, have you tried recording at a smaller screen size (320x240 is typical for video), and using the "follow cursor" camera mode?

Is the 800x600 a fixed camera? Or does it follow the cursor? If it's fixed (which I would recommend), then you should be able to get away with much lower data rates.

I would start off with about 200 Kbps for the video data rate. If the quality is too low, then increase it in increments of about 50 Kbps until the quality is acceptable. If 200 Kbps looks fine, drop it down and see how low you can go. With such low data rates, you definitely have to make sure you have "multi-pass" compression on to obtain the best quality.

Also, change your "Key Frames" to Automatic.

And on your audio track, if you're doing it in mono, you can cut your bitrate in half. 64 Kbps. If it's just spoken word narration, you can probably even drop it as low as 48 or 40.

Also, during your original recording with Snapz, don't use IMA 4:1 for the audio track. Use Linear PCM. You want to maintain as much sonic quality as possible until you do the final compression for delivery.

All of your other settings that I didn't mention look fine.

Here are some changes I've made to the formula:

Quicktime Pro settings:
-350kbs for movies low amounts of movement (worked well for a Google Reader run through, was a bit blurry for a Cover Flow (iTunes) test)
-Keyframe automatic

Snapz Pro X2.1
-Audio for Snapz is set for Qualcomm Pure Voice (no LCM available) at 44.1 mono 16bit with half rate optimized for streaming checker under advanced
options

I'm still at 800x600 because as a viewer I hate having to squint to see video. And I also can't stand blurriness. I understand that my preferences will severely limit shrinking my file size.

RESULTS
My speedy Google Reader run through lasted 20 seconds. After Snapz it was 22.7mb. After Quicktime Pro compression at 350kbs it was 1.018mb.
So for a 30 minute screencast I'm down to 90mb (BEFORE post production in iMovie 08).

If you have any other suggestions, please post them. Both of you have been extremely helpful.

~Kyle~