Check out the Apple Trailers. Notice the quality of the video. You can see what codec they use by viewing the Movie Properties using Quicktime. I don't recommend MPEG-4 now because it just isn't as high quality as some of the other codec formats that are part of Quicktime. I prefer Sorenson Video 3 (I got the Pro version) and Photo Jpeg codecs for the quality of the video, size, and still have the ability to edit the video (some loss of quality will result when editing and re-exporting with lossy compressed video). MPEG-4 will be more competitive with Tiger and the Mpeg-4 H.264 standard.
Experiment with the frames per second and bitrate until you find the combination that looks good for you. Try experimenting with a small 30 second clip vs some 2 hour video to save encoding time.
Also if you want to keep an archive of all your video that you still want to edit, I think DV tapes are the best compared to using a firewire hard drive from a cost standpoint. Archiving to DVD is fine but when it's in MPEG-2 format, you can't edit the video anymore.