So you're asking has anyone ever re-encoded a HD transport stream to a much smaller file using h264, and if they have, have they managed to play it back without their computer exploding?
EDIT; heh Lamer kinda answered already, but yeah, there are rips out there at 700MB HRHD (960x540) xvid vs the 4GB original MPEG2 TS (file sizes varying on network/res/bitrate etc). No one really uses h264 that much (at least not for "scene"/wide distribution) but I do know a few people who re-encode their episodes to 700MB 720p h264. I personally have encoded a 1080i movie to 720p with a bitrate of around 4Mbit/s and it still looked great. If you keep it at 1080 then I expect 6-8Mbit/s would look good, yeah.
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