Recording mpg's

Let's say my stack of videotapes is growing - not to mention a CD-R is $0.15
each and a video tape $2.00. I want to record a TV show onto CD instead of
video tape. I have the Hauppage WinTV card.

I've tried Broadcast2000, with works OK, except that 30 seconds of video
takes up 200MB and there is no audio playback. It's also an AVI file,
not an MPEG.

What does it take to record video and audio and store it in an MPEG that
xtheater understands? I'm a total digital video newbie and need a gentle
shove in the right direction.

Thanks in advance.

George