Compress AVI file in Vista?

Trying to compress an AVI file of 704mb to less than 696mb. When I used the native compress feature it only compresses it to 699mb. I want it to be able to fit in a CD and for some reason when I prep a 702mb CD in vista it leaves 696mb available. What the hell did it do to the 6MBs?

I want to put a 704MB file onto a disk so I can give it to a friend.
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  1. Why don't u go for a DVD?
    It doesn't cost that much, there's a little bit range of price between them... :)
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