Hello and welcome ,
First of all do not expect any big miracle as the files you have are already compressed in Xvid.
To reduce file size you usually have to make some choices and some sacrifices too , here are some basic ( 2-3 ) options you may try ...
1) Reduce video bitrate => lesser quality and pixellisation of the picture.
2) Reduce video size W & H then you get a smaller video size and decrease the weight
3) reduce audio quality.
It all depends , on what you wish to do with your video , if it is to place it on the web may we http://www.cocoonsoftware.com/paypaldonate-us.htm a picture size of 320x240 (4/3) and a video bitrate of between 1000 and 2000.
Audio quality if mp3 frequency should be somewhere around 48000 or below but then you would loose a lot of quality, two channels for audio to keep the stereo and bitrate 128k or less .
You can play around those by using the default profiles we have placed by default in 365
Choose preferably a smaller file size to make your tests ...
I hope this partly answers your question .
Have a good day