1/4 size (video aspect) has nothing to do with filesize.
Filesize is based on compression, and bitrate.
DVD's are mpeg-2, uncompressed mostly.
AVI's are a container for compressed video, DivX and XviD being the most common compressions, and are much smaller.
Use XviD compression, at a low bitrate, and you can get a smaller filesize.
If you want really small (at a loss in quality), try Windows movie maker, and save them as .wmv for email.