There are three main video players - Quicktime, RealPlayer and Windows Media Player. I would suggest you format it for one of these.
They are all pretty good for streaming, I think quicktime does progressive download better, though.
If your audience is all windows, then windows media player would probably be best re market penetration. I'm not sure of the market penetration between quicktime & realplayer, I think quicktime is better and I know people in the video industry love it. Either way, they may have to download both of them.
I'd go for a resolution of 240x320, and for each clip to be no longer than 3 minutes. The longer your clip is, the more change of it stopping to buffer.
File-size is always a trade off between quality and download time.
Some tips are: try not to have many fast moving or complex shots in the video and if you can, expand the colour range of the video to suit the web - video black will look grey on a computer monitor. Making this "grey" black helps compression and looks better.