best way to go from vhs to dvd is a dvd / vcr recorder, and if you were to try to shrink that video it would take hellllla long even with a fast computer. The reason your file is so large is the capture software you recorded with. Normally I capture video directly in the program i am going to edit it in, Premier or final cut but you need a pretty powerful machine to do large videos. Once you have it set up in a program like Premier you can export in all sorts of formats from web optimized to dvd.