Use my preset.
I using h.264 codec for video and aac for audio.
It has great compression ratio without any loss of quality(maybe).
Also i use mkv container.
Just load preset using my preset and choose the files want to encode and press start.
If you want to resize the resolution, under picture tab tick resize and choose the desire resolution.
Note:
change the file extension from h.264.txt to h.264.xml. I did that because I cannot upload .xml file.