File compression won't do shit to video files, you people are retarded for suggesting WinRAR, 7-Zip, WinZIP, etc. He stated 'codec', which is video terminology for coder-decoder. If you have a DVD and want to rip it to a smaller file size, there's XViD. There are many, many video compression codecs out there. XViD is popular because there are stand-alone DVD players that support XViD files.
http://www.vcdhelp.com has a ton of information and forums for this type of thing. You'd get a better response there than you would here. I'd suggest reading the forums before asking such a vague question.
What media are you ripping from? What is the current file size? What is the goal file size? What kind of video is it (lots of movement or home movie)? We need more information before we can give you a detailed answer.
If you want a program to reencode a video, then look into VirtualDub or VirtualDubMod. They are free but don't do much else other than reencode. I prefer Sony Vegas or Adobe Premiere for a full-feature application. There's also TMPEGEnc for encoding, it's vastly popular.