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Your definition of ridiculously large is clearly a lot different to mine. Resolution has little to do with total filesize it is the bitrate that the video is encoded at that defines how large or small the output file will be. Bearing that in mind the size increase is not at all strange as Windows Media is simply doing the best it can within the parameters it has been given.
Knowing what you know now, what exactly do you want to do with this video?
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