ffmpeg provides this functionality. All you need to do is run someting like
ffmpeg -i <inputfilename> -s 640x480 -b 512k -vcodec mpeg1video -acodec copy <outputfilename>
For newer versions of ffmpeg you need to change -b to -b:v:
ffmpeg -i <inputfilename> -s 640x480 -b:v 512k -vcodec mpeg1video -acodec copy <outputfilename>
to convert the input video file to a video with a size of 640 x 480 and a bitrate of 512 kilobits/sec using the MPEG 1 video codec and just copying the original audio stream. Of course, you can plug in any values you need and play around with the size and bitrate to achieve the quality/size tradeoff you are looking for. There are also a ton of other options described in the documentation
Run ffmpeg -formats or ffmpeg -codecs for a list of all of the available formats and codecs. If you don’t have to target a specific codec for the final output, you can achieve better compression ratios with minimal quality loss using a state of the art codec like H.264.