Bitrate and resolution balance

[dbfs]

Let's start with a example... I have a lot of old 4:3 PAL and NTSC DVD's, and some newer 16:9 disc's. I'm planning to convert them to a smaller format for on my harddisk. I think it will be in WMV(vc-1) or Xvid or H264...

To the point, it is not smart to use a bitrate of 1200kbps for a full resolution encoding of a dvd from native dvd 480P DVD to 848x480P, because the bitrate is way to low for a high resolution encoding, it will result in a video with a lot of artifacts.

Resize is the best solution, but you need the best balance between bitrate and resolution, 1200kbps for video in a 16:9 resized 480x270 is too high, no artifacts in the video, but a lot of bitrate is throw away because the low resolution.

Too high resolution is not good because too much data with a too low bitrate which result in smooth video with artifacts.

My plan is to use a bitrate of 1200kbps, I've tried experimenting with different resolution's but a can't make a decision.

My question to you is:'How can I make a good decision and make a good balance between bitrate and resolution for standard def video's, and what is yours balance between resolution and bitrate?