how do you decide what size and speed videos to use?

we're sort of going wtih the "blow the members out of the water" perspective for the member area. the large videos were 1mb at 640x480 but i am re-encoding them all at 720x480 and 1.6mb. we were considering using a 2.2 bitrate but that seemed maybe more than we needed - although i'm still pondering it as at 1024x768 a 1.6mb video does show some loss of quality.

so - how do you balance between budget and quality for your videos?