With DVDSP, you can use VCD style MPEG-1 (352x240). It doesn't look as crisp as DVD MPEG-2 (720x480), but if you use the right compression, it beats videotape quality, which has an even lower resolution.
Use 2000 Kb/sec as a reference rate. (VCD is around 1100 Kb/sec, and DVD is usually 6000-9000 Kb/sec)